Great American Life Insurance 424B3 Prospectus supplement

GREAT AMERICAN LIFE INSURANCE COMPANY

Administrative Office: P.O. Box 5423, Cincinnati OH 45201-5423

Street Address: 301 East Fourth Street, Cincinnati OH 45202

Policy Administration: 1-800-789-6771

INDEX FRONTIER^SM 7 ANNUITY

PROSPECTUS Dated May 1, 2017 and Revised March 19, 2018

The Index Frontier^SM 7 annuity is a modified single premium deferred annuity contract (the “Contract”) issued by Great American Life Insurance Company^® (“Great American Life,” “we” or “us”). It provides that we will pay annuity payout benefits to you in exchange for your purchase payments.

The Contract offers you the opportunity to allocate funds to indexed strategies for one-year periods (a “Term”). Indexed strategies provide returns based, in part, on the change in the value of a market index or the share price of an exchange-traded fund (an “Index”).

• The value of an indexed strategy will increase if there is a positive change in the applicable Index value during a Term. Any increase during a Term is subject to an upper limit called the Maximum Gain. We can change the Maximum Gain for each new Term of an indexed strategy. Before the end of the Term, any increase is also subject to a vesting factor.

• Before the end of a Term, any increase in the value of an indexed strategy is also subject to a vesting factor. The vesting factor limits the portion of the positive change in the Index that we take into account when we calculate the increase in the strategy value. The vesting factor varies depending on the day of the Term. It is 25% for the first half of a Term, 50% for the second half of a Term, and 100% at the end of a Term.

• The value of a Conserve Strategy will not decrease even if there is a negative change in the applicable Index value during a Term.

• The value of a Growth Strategy will decrease if there is a negative change in the applicable Index value during a Term. Any decrease during a Term is subject to a lower limit called the Maximum Loss. The Maximum Loss for each Term of a Growth Strategy is 10%. Each Growth Strategy includes a risk of potential loss of up to 10% of principal each Term.

The Contract currently offers a Conserve Strategy and a Growth Strategy for each of three different Indexes. In general, we will set a higher Maximum Gain for a Growth Strategy than the Maximum Gain for a Conserve Strategy that uses the same Index.

Conserve Strategies	Index	Maximum Loss of 0%
S&P 500 Conserve	S&P 500® Index	If you allocate money at the start of a Term to a Conserve Strategy, you cannot lose that money during the Term due to a negative change in the Index.
SPDR Gold Shares Conserve	SPDR® Gold Shares ETF
iShares U.S. Real Estate  Conserve	iShares U.S. Real Estate ETF
Growth Strategies	Index	Maximum Loss of 10%
S&P 500 Growth	S&P 500® Index	If you allocate money at the start of a Term to a Growth Strategy, you can lose up to 10% of that money during the Term due to a negative change in the Index.
SPDR Gold Shares Growth	SPDR® Gold Shares ETF
iShares U.S. Real Estate  Growth	iShares U.S. Real Estate ETF

The Contract also offers a declared rate strategy, which earns interest during a Term at a fixed rate we set before that Term begins. The fixed interest rate varies from Term to Term, but will never be less than 1%.

An early withdrawal charge may apply if you take a withdrawal during the first seven contract years. That charge will reduce strategy values, including the value of a Conserve Strategy.

Risk Factors for this Contract appear on pages xx-xx and pages xx-xx. Variable indexed annuity contracts are complex insurance and investment vehicles. You should speak with a financial advisor about the Index Frontier 7 and its features, benefits, risks, and fees, and whether the Contract is appropriate for you based upon your financial situation and objectives.

Please read this prospectus before investing and keep it for future reference. It contains important information about your annuity and Great American Life that you ought to know before investing. It describes all material rights and obligations under the Contract.

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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

• The Contract is not insured by the FDIC (Federal Deposit Insurance Corporation) or the NCUSIF (National Credit Union Share Insurance Fund).

• Although the Contract may be sold through relationships with banks or other financial institutions, the Contract is not a deposit or obligation of, or guaranteed by, such institutions or any federal regulatory agency.

• The Contract is a security. It involves investment risk and may lose value.

All guarantees under the Contract are the obligations of Great American Life and are subject to the credit worthiness and claims-paying ability of Great American Life.

The Contract doesn’t invest in any equity, debt or other investments. If you buy this Contract, you aren’t investing directly in an Index, the stocks included in an Index, or the underlying investments or other assets held by an Index.

The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by Great American Life. Standard & Poor’s^®, S&P^®, S&P 500^®, SPDR^® and STANDARD & POOR’S DEPOSITORY RECEIPTS^® are trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Great American Life. Great American Life products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P or their respective affiliates, and none of such parties makes any representation regarding the advisability of investing in such products nor do they have any liability for any errors, omissions, or interruption of the S&P 500 Index.

The iShares U.S. Real Estate ETF is distributed by BlackRock Investments, LLC. iShares®, BLACKROCK®, and the corresponding logos are registered and unregistered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”), and these trademarks have been licensed for certain purposes by Great American Life Insurance Company. Great American Life annuity products are not sponsored, endorsed, sold or promoted by BlackRock, and purchasers of an annuity from Great American Life do not acquire any interest in the iShares U.S. Real Estate ETF nor enter into any relationship of any kind with BlackRock. BlackRock makes no representation or warranty, express or implied, to the owners of any Great American Life annuity product or any member of the public regarding the advisability of purchasing an annuity, nor does it have any liability for any errors, omissions, interruptions or use of the iShares U.S. Real Estate ETF or any data related thereto.

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The principal underwriter of the Contract is Great American Advisors, Inc. The offering of the Contract is intended to be continuous. The underwriter will use its best efforts to sell the Contract.

This prospectus is not an offering in any state, country, or jurisdiction in which we are not authorized to sell the Contract.

If you purchase a Contract, you may cancel it within 20 days after you receive it. If you purchase a Contract to replace an existing annuity contract or insurance policy, you have 30 days to cancel the Contract. The right to cancel period may be longer in some states. In many states, you will bear the risk of investment gain or loss before cancellation. The right to cancel is described more fully in the Right to Cancel section of this prospectus.

Our form number for the Contract is P1822317NW. Our form numbers for the strategy endorsements to the Contract are E1322417NW, E1322517NW, E1322617NW, E1322717NW, E1322817NW, E1322917NW and E1323017NW. The form numbers may vary by state. The Securities and Exchange Commission file number for the Contract is 333-207914.

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Table of Contents
	Page
INDEX FRONTIERSM 7 ANNUITY INFORMATION	1
Special Terms	4
Summary	7
Risk Factors	9
Purchase	12
Initial Strategy Selections	14
Declared Rate Strategy	14
Indexed Strategies	15
Vested Gains and Losses	16
Examples - Impact of Withdrawals on Indexed Strategy Values	20
Strategy Renewals and Reallocations at Term End	25
Cash Benefit	26
Early Withdrawal Charge	33
Annuity Payout Benefit	35
Death Benefit	36
Payout Options	39
Processing Applications and Requests	41
Right to Cancel (Free Look)	43
Annual Statement and Confirmations	43
Electronic Delivery	43
Abandoned Property Requirements	43
Owner	44
Annuitant	45
Beneficiary	45
Other Contract Provisions	45
State Variations	46
Index Replacement	49
Federal Tax Considerations	50
Premium and Other Taxes	53
Distribution of the Contracts	54
Legal Opinion on Contracts	55
Experts	55
Securities and Exchange Commission Position on Indemnification	55
GREAT AMERICAN LIFE INFORMATION	56
Overview	56
Information on GALIC’s Business and Property	58
Risk Factors Related to GALIC’s Business	62
Directors and Executive Officers	66
Executive Compensation	66
Security Ownership of Certain Beneficial Owners and Management	77
Transactions With Related Persons	78
FINANCIAL INFORMATION	80
Forward-Looking Statements	80
Selected Financial Data	81
Management’s Discussion and Analysis	82
Quantitative and Qualitative Disclosures about Market Risk	94
Financial Statements and Supplementary Data	95
The Registration Statement	96
APPENDIX A: FINANCIAL STATEMENTS	97

INDEX FRONTIER^SM 7 ANNUITY INFORMATION

In this prospectus, the following capitalized terms have the meanings set out below.

ACCOUNT VALUE. The sum of the values of each Crediting Strategy, plus the value of the Purchase Payment Account, if any.

ANNUITANT. The natural person or persons on whose life Annuity Payout Benefit is based.

ANNUITY PAYOUT BENEFIT. A series of periodic payments made under a Payout Option. The terms and conditions are described in the Annuity Payout Benefitsection of this prospectus.

ANNUITY PAYOUT INITIATION DATE. The first day of the first payment interval for which payment of an Annuity Payout Benefit is to be made.

BAILOUT TRIGGER. The Maximum Gain for the next Term of an Indexed Strategy that triggers a waiver of Early Withdrawal Charges under the Bailout right of an Indexed Strategy.

BENEFICIARY. A person entitled to receive all or part of a Death Benefit that is to be paid under the Contract on account of a death before the Annuity Payout Initiation Date.

CONTRACT. The legally binding agreement between you and Great American Life, including applicable endorsements and riders.

CONTRACT ANNIVERSARY. The date in each year that is the annual anniversary of the Contract Effective Date. That date is set out on your Contract Specifications Page.

CONTRACT EFFECTIVE DATE. The date as of which the initial Purchase Payment is applied to the Contract. That date is set out on your Contract Specifications Page.

CONTRACT SPECIFICATIONS PAGE. The page in your Contract that contains details unique to your Contract.

CONTRACT YEAR. A 12-month period that starts on the Contract Effective Date or on a Contract Anniversary.

CREDITING STRATEGY. A specified method by which interest or gain or loss is calculated for a Term. The Crediting Strategies that are currently available are set out on the first page of this prospectus.

DEATH BENEFIT. An amount that becomes payable if you die before the Annuity Payout Initiation Date and before the date that the Contract is Surrendered. The terms and conditions are described in the Death Benefit section of this prospectus.

DECLARED RATE. A fixed interest rate set by us for a Term of the Declared Rate Strategy.

DECLARED RATE STRATEGY. A Crediting Strategy that credits interest at a Declared Rate.

EARLY WITHDRAWAL CHARGE. A charge deducted from the Account Value of your Contract if, during the first seven Contract Years, you Surrender your Contract or you take a withdrawal in excess of the Free Withdrawal Allowance.

FREE WITHDRAWAL ALLOWANCE. The total amount that may be taken as a withdrawal or Surrendered during a Contract Year without an Early Withdrawal Charge that would otherwise apply. This amount is described in the Free Withdrawal Allowancesection of this prospectus.

GREAT AMERICAN LIFE (“WE,” “US,” “OUR,” “GALIC”). Great American Life Insurance Company.

INDEX. A stock market index or an exchange-traded fund.

INDEX CHANGE. The increase or decrease, if any, in the applicable Index Value over a Term of an Indexed Strategy.

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INDEX VALUE. For Indexed Strategies that use the S&P 500 Index, the Index Value is the closing value of the Index. For Indexed Strategies that use the SPDR Gold Shares ETF, the Index Value is the fund’s closing share price on the New York Stock Exchange Arca. For Indexed Strategies that use the iShares U.S. Real Estate ETF, the Index Value is the fund’s closing share price on the New York Stock Exchange Arca.

INDEXED STRATEGY. A Crediting Strategy that provides a return based, in part, on changes in an Index Value.

INVESTMENT BASE. The amount applied to an Indexed Strategy at the start of a current Term. A withdrawal or charge reduces the Investment Base. The reduction is proportional to the reduction in the value of that Indexed Strategy due to the withdrawal or charge.

MARKET CLOSE. The close of the regular or core trading session on the market used to measure a given Indexed Strategy.

MARKET DAY. Each day that all markets that are used to measure available Indexed Strategies are open for regular trading.

MAXIMUM GAIN. The largest positive Index Change for a Term that is taken into account to determine the Vested Gain for a given Indexed Strategy. We set the Maximum Gain for each Term of an Indexed Strategy before the first day of that Term. For a given Term, we may set a different Maximum Gain for amounts attributable to Purchase Payments received on different dates.

MAXIMUM LOSS. The most negative Index Change for a Term that is taken into account to determine a Vested Loss for a given Indexed Strategy. The Maximum Loss for a Growth Strategy is a loss of 10% and will apply to all Terms of that Growth Strategy.

OWNER (“YOU,” “YOURS”). The person(s) who possesses the ownership rights under the Contract. If there is more than one Owner, each Owner will be a joint owner of the Contract and each reference to Owner means joint owners.

PAYOUT OPTION. The form in which an Annuity Payout Benefit or Death Benefit may be paid. Standard options are described in the Payout Optionssection of this prospectus.

PURCHASE PAYMENT. An amount received by us for the Contract. This amount is after the deduction of any fee charged by the person remitting payment and any taxes withheld from the payment.

PURCHASE PAYMENT ACCOUNT. An account where a Purchase Payment is held from the date it is applied to the Contract until the first Strategy Application Date on or after that date.

REQUEST IN GOOD ORDER. Information provided or a request made that is:

• complete and satisfactory to us;

• sent to us on our form or in a manner satisfactory to us, which may, at our discretion, be by telephone or electronic means; and

• received at our administrative office.

Information provided or a request made is complete and satisfactory when we have received: (1) all the information and legal documentation that we require to process the information or the request; and (2) instructions that are sufficiently clear that we do not need to exercise any discretion to process the information or the request. If you have any questions, you should contact us or your registered representative before submitting your request.

STRATEGY APPLICATION DATE. The 6th and 20th days of each month.

SURRENDER. The termination of your Contract in exchange for its Surrender Value.

SURRENDER VALUE. The Account Value minus the Early Withdrawal Charge that would apply on a Surrender of the Contract.

TAX-QUALIFIED CONTRACT. An annuity contract that is intended to qualify for special tax treatment for retirement savings. If your Contract is a Tax-Qualified Contract, the cover page of your Contract includes information about its tax qualification. If your Contract is not a Tax-Qualified Contract, the cover page of your Contract will identify it as a “Nonqualified Annuity.”

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TERM. The period for which Contract values are allocated to a given Crediting Strategy, and over which interest or gain or loss is calculated. Each Term is one year long, and will start and end on a Strategy Application Date. A new Term will start on the date that the preceding Term ends.

VESTED GAIN. The portion of any positive Index Change for the Term of an Indexed Strategy that is taken into account when determining the value of that Indexed Strategy. For any day of a Term, the Vested Gain is equal to: (1) any positive Index Change for the Term, but not exceeding the Maximum Gain set for that Term; multiplied by (2) the applicable Vesting Factor for that day; and then multiplied by (3) the remaining Investment Base for that Term.

VESTED LOSS. The portion of any negative Index Change for the Term of an Indexed Strategy that is taken into account when determining the value of that Indexed Strategy. For any day of a Term, the Vested Loss is equal to: (1) any negative Index Change for the Term, after taking into account the Maximum Loss for each Term of that Indexed Strategy; multiplied by (2) the remaining Investment Base for that Term.

VESTING FACTOR. A factor used to determine a Vested Gain. Vesting Factors are described in the Vested Gains and Lossessection of this prospectus.

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Summary

The Great American Life Index Frontier^SM 7 annuity is a modified single premium deferred annuity contract that may help you accumulate retirement savings. The Contract is intended for long term investment purposes. The Contract is a legal agreement between you as the Owner and Great American Life as the issuing insurance company. In the Contract, you agree to make one or more Purchase Payments to us and we agree to pay the Annuity Payout Benefit to you.

Like all deferred annuities, the Contract has two periods. During the period prior to the Annuity Payout Initiation Date, your Contract may accumulate earnings on a tax-deferred basis. During the period that begins on the Annuity Payout Initiation Date, we will make payments under the selected Payout Option.

The following chart describes the key features of the Contract. Read this prospectus for more detailed information about the Contract.

Benefits	•	The Annuity Payout Benefit is a series of periodic payments made under a Payout Option. This benefit can provide you with income for a fixed period of time or for life. It is based on the Account Value on the Annuity Payout Initiation Date.
	•	The Cash Benefit lets you take out all of your Account Value (surrender) or take out part of it (withdrawal). An Early Withdrawal Charge generally applies if you take money out during the first seven Contract Years. You can Surrender your Contract or take a withdrawal before the Annuity Payout Initiation Date.
	•	The Death Benefit is payable if you die before the Annuity Payout Initiation Date. This benefit is paid to your beneficiaries. It is based on the Death Benefit Value, which will never be less than your Purchase Payments, reduced proportionately for withdrawals.
Purchase Payments	The Contract is a modified single premium annuity. This means we will accept Purchase Payments only during the purchase payment period, which ends two months after the Contract Effective Date. The initial Purchase Payment must be at least $25,000. Each additional Purchase Payment must be at least $10,000. You will need our prior approval if:
	•	you are age 75 or younger and want to make a Purchase Payment(s) of more than $1,000,000; or
	•	you are over age 75 and want to make a Purchase Payment(s) of more than $750,000.
Issue Age	Each Owner must be age 80 or younger on the Contract Effective Date.
Indexed Strategies	We currently offer six Indexed Strategies
		Conserve Strategies with 0% Maximum Loss	Index
		S&P 500 Conserve	S&P 500® Index
		SPDR Gold Shares Conserve	SPDR® Gold Shares ETF
		iShares U.S. Real Estate Conserve	iShares U.S. Real Estate ETF
		Growth Strategies with a 10% Maximum Loss	Index
		S&P 500 Growth	S&P 500® Index
		SPDR Gold Shares Growth	SPDR® Gold Shares ETF
		iShares U.S. Real Estate Growth	iShares U.S. Real Estate ETF
		Conserve Strategies
	•	The value of a Conserve Strategy will increase if there is a positive Index Change during a Term. Any positive Index Change is subject to the applicable Maximum Gain for the Term. Before the end of the Term, any positive Index Change is also subject to a Vesting Factor. A Vested Gain can never be more than the Maximum Gain for that Term.
	•	The value of a Conserve Strategy will never decrease due to a negative Index Change during a Term.
		Growth Strategies
	•	The value of a Growth Strategy will increase if there is a positive Index Change during a Term. Any positive Index Change is subject to the applicable Maximum Gain for the Term. Before the end of the Term, any positive Index Change is also subject to a Vesting Factor. A Vested Gain can never be more than the Maximum Gain for that Term.
	•	The value of a Growth Strategy will decrease due to a negative Index Change during a Term. If you allocate money to a Growth Strategy, you can lose up to 10% of that money during the Term due to a negative Index Change. Any negative Index Change of more than 10% is absorbed by us.

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Indexed Strategy Value and Investment Base		At the start of a Term, the value of an Indexed Strategy is equal to the Investment Base for that Term, which is the amount applied to that Strategy for that Term. During a Term, a Vested Gain increases the Strategy value or a Vested Loss reduces the Strategy value. A withdrawal reduces the Strategy value, including the value of any Conserve Strategy,  by the amount of the withdrawal and related Early Withdrawal Charge. A withdrawal reduces the Investment Base by the portion of the Investment Base needed to pay for the withdrawal and related Early Withdrawal Charge. The reduction in the Investment Base is proportional to the reduction in the Strategy value.
Vested Gains and Losses	•	Each day of a Term, the value of an Indexed Strategy is adjusted for the Vested Gain or Loss since the start of that Term. We use the following formulas to calculate Vested Gains and Losses.
	•	Vested Gain = any positive Index Change for the Term (but not exceeding the Maximum Gain set for the Term) x applicable Vesting Factor for that day x remaining Investment Base for the current Term.
	•	Vested Loss = any negative Index Change for the Term (after taking into account the Maximum Loss for the Term) x remaining Investment Base for the current Term.
Maximum Gains		We set a Maximum Gain for each Indexed Strategy prior to the start of each Term. This means the Maximum Gain for an Indexed Strategy may change for each Term. At least 30 days before the next Term starts, we will notify you of the Maximum Gain that will apply to an Indexed Strategy for that Term. In general, we will set a higher Maximum Gain for a Growth Strategy than the Maximum Gain for a Conserve Strategy that uses the same Index.
Maximum Losses		The Maximum Loss for each Term of a Conserve Strategy is 0%. The Maximum Loss for each Term of a Growth Strategy is a loss of 10%.
Vesting Factors		We set the Vesting Factors for the Indexed Strategies on the Contract Effective Date.
	•	For a positive Index Change during a Term, the Vesting Factors are 25% for any date within the first six months of a Term; 50% for any date within the final six months of a Term but before the final Market Date of the Term; and 100% on or after the final Market Date of the Term. A Vesting Factor below 100% limits any positive increase during a Term.
	•	For a negative Index Change during a Term, there is no Vesting Factor.
Declared Rate Strategy		Amounts held under the Declared Rate Strategy are credited with interest daily throughout a Term at a rate we set before that Term begins. This means the interest rate for the Declared Rate Strategy may change for each Term. A Declared Rate will never be less than 1%. At least 30 days before the next Term starts, we will notify you of the Declared Rate that will apply to the Declared Rate Strategy for that Term.
Strategy Renewals		At the end of each Term of a given Crediting Strategy, we will apply the ending value of that Strategy to a new Term of that same Strategy. The amount applied to a new Term will not include any amount that is moved as part of a reallocation at the Term end.
Strategy Reallocations		At the end of a Term, you may reallocate the ending values of the Crediting Strategies for that Term among the Strategies.
Access to Your Money Through Withdrawals		You may take a withdrawal from your Contract at any time prior to the Annuity Payout Initiation Date.
	•	During the first seven Contract Years, unless you qualify for the Free Withdrawal Allowance or the bailout right as described below, an Early Withdrawal Charge will apply.
	•	A withdrawal from an Indexed Strategy during a Term will reduce the Investment Base used to calculate adjustments for any subsequent Vested Gain or Loss in that Term.
Early Withdrawal Charge	An Early Withdrawal Charge applies during the first seven Contract Years if you Surrender your Contract or withdraw an amount in excess of the Free Withdrawal Allowance. The charge is equal to the amount subject to the charge multiplied by the applicable rate set out below.

Contract Year	1		2		3		4		5		6		7		8+
Early Withdrawal Charge Rate	8	%	7	%	6	%	5	%	4	%	3	%	2	%	0%

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	The Early Withdrawal Charge does not apply to the Free Withdrawal Allowance or to any withdrawal under the Bailout right.
Bailout Right	We will waive the Early Withdrawal Charge on an amount you withdraw if: (1) you withdraw it at the end of a Term from an Indexed Strategy; and (2) either the Maximum Gain for such Indexed Strategy for the next Term is less than the Bailout Trigger for the current Term, or such Indexed Strategy will not be available for the next Term. If the Bailout right will apply at the end of a Term, we will notify you at least 30 days before the end of that Term.
Payout Options	Like all annuity contracts, the Contract offers a range of Payout Options, which provide payments for your lifetime or for a fixed period. After payments begin, you cannot change the Payout Option or any fixed period you selected. The standard Payout Options are listed below.
	•	Fixed Period Payout
	•	Life Payout
	•	Life Payout with Payments for at Least a Fixed Period
	•	Joint and One-half Survivor Payout
Death Benefit	A Death Benefit is payable under the Contract if you die before the Annuity Payout Initiation Date. If the Owner is a non-natural person, such as a trust or a corporation, then a Death Benefit is payable under the Contract if an Annuitant dies before the Annuity Payout Initiation Date.  The Death Benefit Value is the greater of: (1) the Account Value as of the applicable date; or (2) your Purchase Payment(s) reduced proportionally for all withdrawals, but not including amounts applied to pay Early Withdrawal Charges.
Tax Deferral	The Contract is generally tax deferred, which means that you are not taxed on the earnings in your Contract until the money is paid to you. Contracts owned by non-natural owners, such as trusts and corporations, are subject to special rules.  A tax-qualified retirement plan such as an IRA also provides tax deferral. Buying the Contract within a tax-qualified retirement plan does not give you any extra tax benefits. There should be reasons other than tax deferral for buying the Contract within a tax-qualified retirement plan.
Right to Cancel	If you purchase a Contract, you may cancel it within 20 days after you receive it. If you purchase a Contract to replace an existing annuity contract or insurance policy, you have 30 days to cancel the Contract. The right to cancel period may be longer in some states. In many states, you will bear the risk of investment gain or loss before cancellation.

Risk Factors

The Contract involves certain risks that you should understand before purchasing it. You should carefully consider your income needs and risk tolerance to determine whether the Contract or a particular Indexed Strategy is appropriate for you. The level of risk you bear and your potential investment performance will differ depending on the Crediting Strategies you choose.

Loss of Principal Related to Growth Strategy

There is a significant risk of loss of principal and related earnings if you allocate your Purchase Payment(s) to a Growth Strategy. Such a loss may be substantial. This risk exists for each Growth Strategy because you agree to absorb any loss in the Index during the Term up to the Maximum Loss of 10%. This risk of loss does not exist if you allocate your Purchase Payment(s) to the Declared Rate Strategy or to a Conserve Strategy. If you allocate money to a Growth Strategy over multiple Terms, you may lose up to 10% each Term, which may result in a cumulative loss that is greater than 10%.

Loss of Principal Related to Early Withdrawal Charge

There is also a risk of loss of principal and related earnings if you take a withdrawal from your Contract or surrender it during the first seven Contract Years. This risk exists for each Strategy because an Early Withdrawal Charge may apply. A withdrawal from any Strategy, including any Conserve Strategy when an Early Withdrawal Charge applies will reduce the value of the Strategy. This reduction will occur even if there is a Vested Gain on the date of the withdrawal. An Early Withdrawal Charge may reduce the value of an Indexed Strategy by more than increases in the value of the Indexed Strategy resulting from Vested Gains in the current and prior Terms.

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Long-Term Nature of Contract	The Contract is a deferred annuity, which means the Annuity Payout Benefit will begin on a future date. We designed the Contract to be a long-term investment that you can use to help build a retirement nest egg and provide income for retirement. The limitations, adjustments and charges included in the Contract reflect its long-term nature.
Limits on Investment Return	Any positive adjustment to an Indexed Strategy is limited by a Maximum Gain. Any positive adjustment before the end of a Term is also limited by a Vesting Factor, which will be less than 100%. Due to these limitations, in many cases the return on money allocated to an Indexed Strategy will not fully reflect the corresponding positive Index Change for a Term. An adjustment only captures an Index Value at the applicable Market Close. You will bear the risk that an Index Value might be significantly lower at that Market Close than at another point during the Term.
Limits on Reallocations	You cannot reallocate money among the Crediting Strategies prior to the end of a Term. If you want to take money out of Strategy during a Term, you must take a withdrawal from that Strategy or Surrender your Contract.
Early Withdrawal Charge	If you withdraw money from or Surrender the Contract during the first seven Contract Years, we will deduct an Early Withdrawal Charge unless the Free Withdrawal Allowance or Bailout right applies. Deduction of the Early Withdrawal Charge may result in loss of principal. An Early Withdrawal Charge will reduce Strategy values, including Conserve Strategy values.
Timing of Withdrawals, Surrender, Annuity Payout Initiation Date, or Death Benefit Claim	You should take into consideration the dates on which the Term(s) of your Indexed Strategies end relative to the timing of a withdrawal or Surrender, the Annuity Payout Initiation Date, or the submission of a Death Benefit claim. For example, a withdrawal from an Indexed Strategy before the end of a Term will lock in the existing Vested Gain or Loss. In addition, due to the Vesting Factors that we use to calculate Vested Gains, the adjustment for the Vested Gain before the end of a Term will be less than the corresponding positive Index Change.
No Ability to Determine Adjustments in Advance	If you request a withdrawal from an Indexed Strategy, we will process the withdrawal at the first Market Close after receipt of your Request in Good Order. This means you will not be able to determine in advance whether the adjustment that applies due to the withdrawal will be positive or negative or to calculate the amount of that adjustment. Likewise, you will not be able to determine in advance the nature and size of an adjustment to an Indexed Strategy that applies to the amount payable upon Surrender, applied to the Annuity Payout Benefit, or payable as the Death Benefit.
Changes in Declared Rates	We set a Declared Rate for each new Term of the Declared Rate Strategy. The Declared Rate may be as low as 1%. You risk the possibility that the Declared Rate for a new Term may be lower than you would find acceptable.
Changes in Maximum Gains	We set a Maximum Gain for each new Term of an Indexed Strategy. The Maximum Gain for a new Term of an Indexed Strategy may be lower than its Maximum Gain for the current Term and may be as low as 1%. You risk the possibility that the Maximum Gain for a new Term may be lower than you would find acceptable.
Unavailable Indexed Strategies	At the end of a Term, we may stop offering any Indexed Strategy and, consequently, an Indexed Strategy you selected may not be available after the end of a Term. An Indexed Strategy you selected also may not be available after the end of a Term due to minimums and maximums that we set. In that case, we will reallocate the applicable funds to a default Strategy. The funds allocated to a default Strategy may earn a return that is lower than the return they would have earned if there had been no reallocation, but will not increase the risk of loss of principal.
Unavailable Declared Rate Strategy	At the end of a Term, we may stop offering the Declared Rate Strategy and, consequently, only Indexed Strategies, which may earn 0% for any Term, will be available after the end of the Term. In this case, we will offer at least one Indexed Strategy with a Maximum Loss of 0%. Unlike a Declared Rate Strategy, no earnings are guaranteed for an Indexed Strategy.
Replacement of an Index	We have the right to replace an Index if it is discontinued or we are no longer able to use it, its calculation changes substantially, or we determine that hedging instruments are difficult to acquire or the cost of hedging becomes excessive. We may do so at the end of a Term or during a Term. If we replace an Index during a Term, we will calculate adjustments for Vested Gains and Losses using the old Index up until the replacement date. After the replacement date, we will calculate adjustments for Vested Gains and Losses using the new index. The performance of the new Index may not be as good as the performance of the old Index. As a result, funds allocated to an Indexed Strategy may earn a return that is lower than the return they would have earned if there had been no replacement.

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Involuntary Termination of Contract	If your Account Value falls below the minimum value of $5,000 for any reason, we may terminate your Contract. For example, we may terminate your Contract if a loss on a Growth Strategy causes your Account Value to fall below $5,000.
No Direct Investment in the Market	When you allocate money to an Indexed Strategy that uses the S&P 500 Index, you will not be investing in that Index, or in any stock included in that Index. Index Changes for these Strategies are calculated without taking into account dividends paid on stocks that make up the S&P 500 Index. When you allocate money to an Indexed Strategy that uses the SPDR Gold Shares ETF, you will not be investing in that exchange-traded fund or in gold. When you allocate money to an Indexed Strategy that uses the iShares U.S. Real Estate ETF, you will not be investing in that exchange-traded fund, in the securities or other assets that it holds, or in any real estate investment trust.
	Because changes in the value of an Indexed Strategy are subject to Maximum Gains and Maximum Losses and may be subject to a Vesting Factor, the performance of an Indexed Strategy may diverge from the performance of the Index.

Market Risk	Money allocated to a Growth Strategy that uses the S&P 500 Index is subject to the risk that the market value of the underlying securities that comprise the S&P 500 Index may decline. You will absorb any such market loss up to the amount of the Maximum Loss of 10%. In addition, any positive change in the Index Value over a Term will be lower than the total return on an investment in the stocks that comprise the S&P 500 Index because the total return will reflect dividend payments on those stocks and the Index Values will not reflect those dividend payments. Because the return on an indexed strategy that uses the S&P 500 Index will be subject to limitations and will be linked to its performance and not the performance of the underlying stocks, your return may be less than that of a direct investment in such stocks. Money allocated to a Growth Strategy that uses the SPDR Gold Shares ETF is subject to the risk that its share price may decline. You will absorb any such market loss up to the amount of the Maximum Loss of 10%. The share price of the SPDR Gold Shares ETF is tied to the price of gold, which has fluctuated widely over the past several years. The share price may not replicate the performance of gold. In addition, because the return on any indexed strategy that uses the SPDR Gold Shares EFT will be subject to limitations and will be linked to the performance of the SPDR Gold Shares ETF and not the performance of the price of gold, your return may be less than that of another investment linked directly to the fund’s performance or the price of gold. Money allocated to a Growth Strategy that uses the iShares U.S. Real Estate ETF is subject to the risk that its share price may decline. You will absorb any such market loss up to the amount of the Maximum Loss of 10%. The share price of the iShares U.S. Real Estate ETF is tied to the performance of the real estate sector, which is highly sensitive to general and local economic conditions and developments, characterized by intense competition and periodic overbuilding, and subject to risks associated with leverage. The share price may not replicate the performance of the fund, its underlying index, or the components of that index. In addition, because the return on any indexed strategy that uses the iShares U.S. Real Estate EFT will be subject to limitations and will be linked to the performance of the iShares U.S. Real Estate EFT and not the performance of its underlying index or the components of that index, your return may be less than that of another investment linked directly to the performance of the fund, its underlying index, or a direct investment in such components.
	The historical performance of an Index does not guarantee future results.
Regulatory Risk	Great American Life is not an investment company and is not registered as an investment company under the Investment Company Act of 1940. The protections provided to investors by that Act are not applicable to the Contract.
Reliance on Our Claims-Paying Ability	No company other than Great American Life has any legal responsibility to pay amounts owed under the Contract. You should look to the financial strength of Great American Life for its claims- paying ability.
	Various factors, such as those listed below, could materially affect our business, financial condition, cash flows or future results and, in turn, our financial strength and claims-paying ability. A more complete discussion of these factors appears on pages xx-xx.
	•	Adverse developments in financial markets and deterioration in global economic conditions
	•	Changes in interest rates
	•	Intense competition
	•	Inability to attract and retain independent agents
	•	Inability to obtain reinsurance or to collect on ceded reinsurance
	•	Regulatory restrictions
	•	Failure to maintain a commercially acceptable financial strength rating
	•	Difficulties with technology or data security
	•	Variations from the actuarial assumptions used to establish certain assets and liabilities in our annuity business

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Purchase

You may purchase a Contract only through a registered representative of a broker-dealer that has a selling agreement with our affiliated underwriter, Great American Advisors, Inc.

Any Owner or Annuitant must be age 80 or younger on the Contract Effective Date. To determine eligibility, we will use the person’s age on his/her last birthday. We may make exceptions with respect to the maximum issue age in our discretion.

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The Contract is not available in all states. To find out if it is available in the state where you live, ask your registered representative. The Contract may not be available for purchase during certain periods. There are a number of reasons why the Contract periodically may not be available, including that we want to limit the volume of sales of the Contract. You may wish to speak to your registered representative about how this may affect your purchase. For example, in order to purchase the Contract, you may be required to submit your application prior to a specific date. In that case, if there is a delay because your application is incomplete or otherwise not in good order, you might not be able to purchase the Contract. Your broker-dealer may impose conditions on the purchase of the Contract, such as a lower maximum issue age, than we or other selling firms impose. We reserve the right to reject any application in our discretion.

Purchase Payments

The Contract is a modified single premium annuity contract. This means you may make one or more Purchase Payments during the purchase payment period. The purchase payment period begins on the Contract Effective Date. It will end two months after the Contract Effective Date.

We must receive your initial Purchase Payment on or before the Contract Effective Date. We must receive each additional Purchase Payment before the last day of the purchase payment period. We will not accept any Purchase Payment that we receive after the date that the Contract is cancelled or Surrendered or after a death for which a Death Benefit is payable.

The initial Purchase Payment must be at least $25,000. Each additional Purchase Payment must be at least $10,000. You will need our prior approval if you are age 75 or younger and want to make a Purchase Payment(s) of more than $1,000,000; or you are over age 75 and want to make a Purchase Payment(s) of more than $750,000.

We reserve the right to refuse a Purchase Payment made in the form of a personal check in excess of $100,000. We may accept a Purchase Payment over $100,000 made in other forms, such as EFT/wire transfers, or certified checks or other checks written by financial institutions. We will not accept a Purchase Payment made with cash, money orders, or traveler’s checks.

Exchanges, Transfers, or Rollovers

If you own an annuity or tax-qualified account, you may be able to exchange it for an Index Frontier 7 annuity, directly transfer it to an Index Frontier 7 annuity, or roll it over to an Index Frontier 7 annuity without paying taxes. Before you do, compare the benefits, features, and costs of each annuity or account. You may pay an early withdrawal charge under the old annuity or account. You may also pay a sales charge under the new annuity or account, or you may pay an early withdrawal charge if you later take withdrawals from the new annuity or account. Ask your registered representative whether an exchange, transfer, or rollover would be advantageous, based on the features, benefits, and charges of the Index Frontier 7 annuity.

If you purchase your Contract with an exchange, transfer, or rollover, a delay in processing the exchange, transfer, or rollover may delay the issuance of your new Contract or prevent the application of additional Purchase Payments to your existing Contract.

Application of Purchase Payments

Each Purchase Payment will be held in the Purchase Payment Account until it is applied to a Crediting Strategy on a Strategy Application Date. On each Strategy Application Date, we will apply the then current balance of the Purchase Payment Account to the Crediting Strategies you selected.

In certain states, we are required to give back your Purchase Payment(s) if you decide to cancel your Contract during the free look period. If we are required by law to refund your Purchase Payment(s), we reserve the right to hold your Purchase Payment(s) in the Purchase Payment Account until the first Strategy Application Date on or after the end of the free look period.

We will credit interest daily on amounts held in the Purchase Payment Account at the annual effective rate set out in your Contract. This rate will be at least 1%.

Purchase Payment Account Value

On any day, the value of the Purchase Payment Account is equal to:

• Purchase Payments received by us plus interest earned daily; minus

• the premium tax or other tax that may apply to the Purchase Payments; and minus

• each withdrawal and related Early Withdrawal Charge taken from the Purchase Payment Account since the last Strategy Application Date.

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Initial Strategy Selections

You make your initial selection of Crediting Strategies in your purchase application. Your initial selection is set out on your Contract Specifications Page.

Your initial selection will also apply to each subsequent Purchase Payment. If you wish to change your selection for a specific Purchase Payment, we must receive your Request in Good Order with the Crediting Strategies you selected for that Purchase Payment before the Strategy Application Date that applies to that Purchase Payment.

When you select a Crediting Strategy, you must also indicate the percentage of the Purchase Payment that you wish to allocate to that Crediting Strategy. All allocations must be in whole percentages that total 100%. We reserve the right to round amounts up or down to make whole percentages, and to reduce or increase amounts proportionally in order to total 100%.

Currently there are no limitations on the amounts that may be applied to a Crediting Strategy.

We may establish minimum and maximum amounts or percentages that may be applied to a given Crediting Strategy for any future Term in our discretion. We will notify you of any such minimum or maximum. We may limit the availability of a Strategy for a Term that would extend beyond the Annuity Payout Initiation Date. All Strategies may not be available in all states.

Declared Rate Strategy

The Declared Rate Strategy earns interest at a fixed rate with annual compounding. Interest will be credited daily to amounts held under the Declared Rate Strategy.

We will set the Declared Rate for a Term before that Term starts. It is guaranteed for the entire Term.

We may set a different Declared Rate for each subsequent Term. For a Term, different rates may apply with respect to amounts attributable to Purchase Payments received on different dates. We will notify you of the Declared Rate for a Term at least 30 days before that Term begins.

In any event, the Declared Rate for a Term will never be less than the guaranteed minimum interest rate set out in the Declared Rate Strategy endorsement included in your Contract. This rate will be at least 1% per year.

Term

Each Term of the Declared Rate Strategy is one year long and will start and end on a Strategy Application Date. A new Term will start at the end of the preceding Term.

If you make only one Purchase Payment or you make all of your Purchase Payments before the initial Strategy Application Date, then each Term of the Declared Rate Strategy will end on the same date in any given year. If you make a Purchase Payment after the initial Strategy Application Date, then your Purchase Payments will be applied to the Crediting Strategies on different Strategy Application Dates. In this case, the Declared Rate Strategy will have Terms that end on different dates in any given year.

Examples. These examples show how a Contract with multiple Purchase Payments may have Terms that end on different dates.

• You make your initial Purchase Payment on March 10 and another Purchase Payment on March 17. You allocate both payments to the Declared Rate Strategy and both payments are applied on March 20. Each Term of the Declared Rate Strategy will start and end on March 20.

• You make your initial Purchase Payment on May 2 and another Purchase Payment on June 14. You allocate both payments to the Declared Rate Strategy. Your initial Purchase Payment is applied on May 6 and the other Purchase Payment is applied on June 20. The Declared Rate Strategy will have Terms that start and end on May 6 and other Terms that start and end on June 20.

Declared Rate Strategy Value

The value of the Declared Rate Strategy is equal to:

• the amounts applied to the Strategy at the start of the current Term; minus

• each withdrawal and related Early Withdrawal Charge taken from the Strategy during the current Term; plus

• interest that we have credited on the balances in the Strategy for the current Term.

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Indexed Strategies

The Indexed Strategies provide returns that are based, in part, upon changes in an Index Value. The Indexed Strategies do not earn interest at a fixed rate. Unlike a traditional variable annuity, the values of the Indexed Strategies are not based on the investment performance of underlying portfolios.

Each Indexed Strategy has a Maximum Gain and a Maximum Loss for each Term.

• We will set a new Maximum Gain for each Indexed Strategy prior to the start of each Term. In general, the Maximum Gain for a Growth Strategy will be higher than the Maximum Gain for the corresponding Conserve Strategy.

• The Maximum Loss for each Term of a Conserve Strategy is 0%. The Maximum Loss for each Term of a Growth Strategy is a loss of 10%.

Changes in the value of an Indexed Strategy reflect the change in the applicable Index Value since the start of the applicable Term, the Maximum Gain we set for that Indexed Strategy for that Term, the applicable Vesting Factor, and the Maximum Loss for that Indexed Strategy. If an Indexed Strategy has a Maximum Loss of 10%, then each Term it is possible for you to lose a portion of your Purchase Payment(s) and any earnings allocated to that Indexed Strategy.

See Vested Gains and Losses section below for additional details.

The Indexed Strategies that are currently available are listed below. You may allocate your funds to any of the Indexed Strategies, subject to the procedures disclosed in this prospectus.

Conserve Strategies	Index	Maximum Loss of 0%
S&P 500 Conserve	S&P 500® Index	If you allocate money at the start of a Term to a Conserve Strategy, you cannot lose that money during the Term due to a negative change in the Index.
SPDR Gold Shares Conserve	SPDR® Gold Shares ETF
iShares U.S. Real Estate Conserve	iShares U.S. Real Estate ETF
Growth Strategies	Index	Maximum Loss of 10%
S&P 500 Growth	S&P 500® Index	If you allocate money at the start of a Term to a Growth Strategy, you can lose up to 10% of that money during the Term due to a negative change in the Index.
SPDR Gold Shares Growth	SPDR® Gold Shares ETF
iShares U.S. Real Estate Growth	iShares U.S. Real��Estate ETF

An Early Withdrawal Charge may apply if you take a withdrawal during the first seven Contract Years. That charge will reduce Strategy values, including the value of a Conserve Strategy.

Term

Each Term of an Indexed Strategy is one year long and will start and end on a Strategy Application Date. A new Term will start at the end of the preceding Term.

If you make only one Purchase Payment or you make all of your Purchase Payments before the initial Strategy Application Date, then each Term of each Indexed Strategy will end on the same date in any given year. If you make a Purchase Payment after the initial Strategy Application Date, then your Purchase Payments will be applied to the Crediting Strategies on different Strategy Application Dates. In this case, an Indexed Strategy may have Terms that end on different dates in any given year.

Examples. These examples show how a Contract with multiple Purchase Payments may have Terms that end on different dates.

• You make your initial Purchase Payment on March 10 and another Purchase Payment on March 17. You allocate both payments to the same Indexed Strategy and both payments are applied on March 20. Each Term of that Indexed Strategy will start and end on March 20.

• You make your initial Purchase Payment on May 2 and another Purchase Payment on June 14. You allocate both payments to the same Indexed Strategy. Your initial Purchase Payment is applied on May 6 and the other Purchase Payment is applied on June 20. That Indexed Strategy will have Terms that start and end on May 6 and other Terms that start and end on June 20.

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Indexed Strategy Value

The value of an Indexed Strategy is equal to:

• the Investment Base for that Term, which is the amount applied to the Strategy at the start of the current Term; minus

• the portion of that Investment Base that is taken from the Strategy to pay for each withdrawal and related Early Withdrawal Charge during the current Term; and plus or minus

• the Vested Gain or Loss for that Term on the remaining portion of the Investment Base.

The portion of the Investment Base that is taken from an Indexed Strategy to pay for a withdrawal or charge is the amount that, when Vested Gain or Loss is included, equals the withdrawal or charge.

• If there is a Vested Gain, then the portion of the Investment Base taken will be less than the withdrawal or charge.

• If there is a Vested Loss, then the portion of the Investment Base taken will be greater than the withdrawal or charge.

• A withdrawal or charge will reduce the value of an Indexed Strategy by an amount equal to the withdrawal or charge.

• But the reduction in the Investment Base to pay for a withdrawal or charge is proportional to the reduction in the value of the Indexed Strategy due to the withdrawal or charge.

Here are the formulas that we use to calculate a proportional reduction in the Investment Base and the remaining Investment Base.

Percentage reduction in Strategy value = withdrawal / Strategy value immediately before the withdrawal

Proportionate reduction in Investment Base = Investment Base immediately before the withdrawal x percentage reduction in Strategy value

Remaining Investment Base = Investment Base immediately before the withdrawal - reduction in Investment Base

Examples. You allocate $5,000 to an Indexed Strategy at the start of a Term. This means the Investment Base for the Term is $5,000. You take a $1,000 withdrawal and no Early Withdrawal Charge applies to the withdrawal.

Assume at the time of your withdrawal that you have a Vested Gain of 5%.

• The Vested Gain is equal to $250 ($5,000 x 0.05).

• The Strategy value on the withdrawal date is $5,250 ($5,000 + $250).

• The withdrawal reduces the Strategy value by $1,000.

• The Strategy value after the withdrawal is $4,250 ($5,250 - $1,000).

• The percentage reduction in the Strategy value is 19.05% ($1,000 / $5,250).

• The proportionate reduction in the Investment Base is $952 ($5,000 x 0.1905).

• The remaining Investment Base is $4,048 ($5,000 - $952).

• Due to the Vested Gain, the proportionate reduction in the Investment Base ($952) is less than the withdrawal ($1,000). This means, after the withdrawal, the Investment Base is $4,048 rather than $4,000.

Assume at the time of your withdrawal that you have a Vested Loss of 10%.

• The Vested Loss is equal to $500 ($5,000 x 0.10).

• The Strategy value on the withdrawal date is $4,500 ($5,000 - $500).

• The withdrawal reduces the Strategy value by $1,000.

• The Strategy value after the withdrawal is $3,500 ($4,500 - $1,000).

• The percentage reduction in the Strategy value is 22.22% ($1,000 / $4,500).

• The proportionate reduction in the Investment Base is $1,111 ($5,000 x 0.2222).

• The remaining Investment Base is $3,889 ($5,000 - $1,111).

• Due to the Vested Loss, the proportionate reduction in the Investment Base ($1,111) is greater than the withdrawal ($1,000). This means, after the withdrawal, the Investment Base is $3,889 rather than $4,000.

Vested Gains and Losses

Overview

Each day of a Term, the value of an Indexed Strategy includes the Vested Gain or Loss, if any, since the start of that Term. Vested Gain or Loss is calculated on the remaining Investment Base for that Term.

Here is the formula that we use to calculate the amount of the Vested Gain or Loss.

Amount of Vested Gain or Loss = remaining Investment Base x Vested Gain or Loss percentage

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Example. At the beginning of a Term, your entire Account Value of $100,000 is allocated to a Growth Strategy. You do not take any withdrawals during that Term. You Surrender your Contract at the end of that Term. For this example, we assume that no Early Withdrawal Charge applies when you Surrender your Contract.

• If the Vested Gain is 4%, then the Strategy value includes a $4,000 Vested Gain ($100,000 x 0.04). The amount payable upon Surrender will be $104,000 ($100,000 + $4,000).

• If the Vested Loss is 3%, then the Strategy value includes a $3,000 Vested Loss ($100,000 x 0.03). The amount payable upon Surrender will be $97,000 ($100,000 - $3,000).

Index Change. Before we can calculate the Vested Gain or Loss since the start of a Term, we must determine the Index Change since the start of that Term. The Index Change is the increase or decrease in the applicable Index Value. This increase or decrease is expressed as a percentage of the applicable Index Value at the start of that Term. It is measured from the Index Value at the start of that Term to the Index Value at the last Market Close on or before the date the Index Change is determined.

Example. The Index Value was 1000 at the start of a Term.

• If the Index Value at the applicable Market Close is 1065, then there is a positive Index Change of 6.5% ((1065 - 1000) / 1000).

• If the Index Value at the applicable Market Close is 925, then there is a negative Index Change of 7.5% ((925 - 1000) / 1000).

Indexes. The S&P 500® Index is designed to reflect the large-cap sector of the U.S. equity market and, due to its composition, it also represents the U.S. equity market in general. It includes 500 leading companies and captures approximately 80% coverage of available market capitalization. The S&P 500 Index does not include dividends declared by any of the companies in this index. Consequently, any positive change in the Index Value over a Term will be lower than the total return on a direct investment in the stocks that comprise the S&P 500 Index. The S&P 500 Index is a product of S&P Dow Jones Indices LLC. For more information, visit www.US.SPIndices.com.

The SPDR Gold Shares represent units of beneficial interest in, and ownership of, the SPDR Gold Trust, an exchange traded fund that holds gold bullion. The investment objective of the trust is for the shares to reflect the performance of the price of gold bullion, less the trust’s expenses. The shares are designed to mirror as closely as possible the price of gold, and the value of the shares relates directly to the value of the gold held by the trust, less its liabilities. The price of gold has fluctuated widely over the past several years and the shares have experienced significant price fluctuations. The value of the gold held by the trust is determined using the London Bullion Market Association (LBMA) Gold Price PM. The Gold Shares trade on the NYSE Arca under the symbol GLD. For more information, visit www.spdrgoldshares.com.

The iShares U.S. Real Estate ETF is an exchange traded fund that seeks to track the investment performance of the Dow Jones U.S. Real Estate Index. This underlying index measures the performance of the real estate sector in the U.S. equity market. A significant portion of the underlying index is represented by real estate investment trusts (REITs), but the components are likely to change over time. The fund’s adviser uses an indexing strategy that involves investing in a representative sample of securities that collectively has an investment profile similar to that of the underlying index. The fund is subject to certain risks including the risk that it may not replicate the performance of the underlying index and those risks associated with concentrated investment in REITS. The fund’s performance will be reduced by its expenses and fees. The fund’s shares trade on the NYSE Arca under the symbol IYR. For more information, visit www.iShares.com and search ticker symbol IYR.

Index Values. Index Values are determined at each Market Close. An Index Value at the start of a Term is its value at the last Market Close on or before the first day of that Term. An Index Value at the end of a Term is its value at the Market Close on the last Market Day of that Term. We will use consistent sources to obtain the closing values of an Index. We currently obtain the closing values for the S&P 500 Index and the SPDR Gold Shares ETF from S&P Dow Jones Indices LLC and the closing values for the iShares U.S. Real Estate ETF from BlackRock, Inc. If those sources are no longer available, we will select an alternative published source(s) to obtain such values.

Market Close. A Market Close is the close of the regular or core trading session on the market used to measure an Index Change for a give Indexed Strategy.

Market Day. A Market Day is each day that all markets that are used to measure Index Changes for available Indexes Strategies are open for regular trading.

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Vested Gain

The Vested Gain is the portion of any positive Index Change that is taken into account when determining the value of an Indexed Strategy. Here is the formula that we use to calculate a Vested Gain for any day of a Term.

Vested Gain = any positive Index Change since the start of the current Term (but not exceeding the Maximum Gain set for the Term) x applicable Vesting Factor for that day x remaining Investment Base for the current Term

Maximum Gain. The Maximum Gain for an Indexed Strategy is the largest positive Index Change for a Term that is taken into account to determine the Vested Gain for that Indexed Strategy for that Term. For example, if the Maximum Gain for a Term is 5% and the Index Change at the end of that Term is positive 8%, then the Vested Gain for that Term is 5%.

• The Maximum Gain will vary between Indexed Strategies.

• The Maximum Gain for a given Indexed Strategy will vary between Terms.

• We guarantee that the Maximum Gain for a Term of an Indexed Strategy will never be less than 1%.

• Your return on an Indexed Strategy may be less than the Maximum Gain.

We set the Maximum Gain for each Indexed Strategy based on the cost of hedging, interest rates, and other market factors.In general, the Maximum Gain we set for a Growth Strategy will be higher than the Maximum Gain we set for the corresponding Conserve Strategy.

For information about the current Maximum Gain for each Indexed Strategy offered for new Contracts, please contact your registered representative. Once your Contract is effective, we will send you a written notice at least 30 days before the end of each Term with information about the Indexed Strategies that will be available for the next Term and the Maximum Gain that will apply to each such Indexed Strategy for the next Term.

Because we can change the Maximum Gain that applies to an Indexed Strategy, the Contract has a Bailout right that allows you to take a withdrawal without incurring an Early Withdrawal Charge under certain circumstances. See Bailout Right discussion in the Early Withdrawal Charge section below.

Vesting Factor. The Vesting Factor varies depending on the day of the Term for which the Vested Gain is calculated. A Vesting Factor limits the portion of a positive Index Change that is taken into account when calculating the Vested Gain for a given Indexed Strategy for a given Term.

	Vesting Factor
Dates within first six months of a Term	25%
Dates within the final six months of a Term but before the final Market Day of that Term	50%
On the final Market Day of a Term	100%

A Market Day is each day that all markets that are used to measure Index Changes for available Indexes Strategies are open for regular trading.

Months are measured from the first day of the Term. For example, if a Term starts on January 20, the final six months of that Term will begin on July 20.

If any date in a Term is after the final Market Day of that Term, then a 100% Vesting Factor applies on that date when Vested Gain for that Term is calculated. For example, if a Term ends on a Monday when the markets are closed due to a holiday, then the final Market Day of that Term is the Friday before that holiday. If an automatic transaction is scheduled for Saturday, then the 100% Vesting Factor applies to that transaction.

Example. Your entire Account Value of $100,000 is allocated to the S&P 500 Growth Strategy, which has a 12% Maximum Gain for the Term. You Surrender your Contract in month 9 of that Term, which means a Vesting Factor of 50% applies. For this example, we assume that you did not take any withdrawals before you Surrender your Contract and no Early Withdrawal Charge applies when you Surrender your Contract. Assume there is a positive Index Change of 15% at the date on which you Surrender your Contract. Because the Index Change exceeds the Maximum Gain, the Maximum Gain applies and limits the Index Change to 12%. As a result, the Vested Gain is 6% (12% x 0.50). The Vested Gain that applies upon Surrender will be $6,000 ($100,000 x 0.06) and the amount payable will be $106,000.

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Vested Loss

The Vested Loss is the portion of any negative Index Change that is taken into account when determining the value of an Indexed Strategy. Here is the formula that we use to calculate a Vested Loss for any day of a Term.

Vested Loss = any negative Index Change since the start of the current Term (after taking into account the Maximum Loss for each Term) x remaining Investment Base for the current Term

Maximum Loss. The Maximum Loss for an Indexed Strategy is the most negative Index Change for a Term that is taken into account to determine the Vested Loss for that Indexed Strategy for that Term. For example, if the Maximum Loss for a Term is 10% and the negative Index Change at the end of that Term is 14%, then the Vested Loss for that Term is 10%.

• The Maximum Loss for each Term of a Conserve Strategy is 0%. This means that the value of a Conserve Strategy will not decrease due to a negative Index Change.

• The Maximum Loss for each Term of a Growth Strategy is a loss of 10%. This means that the value of a Growth Strategy will not decrease by more than 10% during a Term due to a negative Index Change.

No Vesting Factor. A Vesting Factor does not apply when the Vested Loss is calculated. This means that all of the negative Index Change is taken into account when calculating the Vested Loss for a given Indexed Strategy for a given Term.

Example. Your entire Account Value of $100,000 is allocated to the S&P 500 Growth Strategy, which has a 10% Maximum Loss. You Surrender your Contract before the end of a Term. For this example, we assume that you did not take any withdrawals before you Surrender your Contract and no Early Withdrawal Charge applies when you Surrender your Contract. Assume there is a negative Index Change of 12.5% on the day that you Surrender your Contract. Because the Index Change exceeds the Maximum Loss, the Maximum Loss applies and limits the Index Change to 10%. As a result, the Vested Loss is 10%. The Vested Loss that applies upon Surrender will be $10,000 ($100,000 x 0.10 = $10,000) and the amount payable will be $90,000.

Effect of Vested Gains and Losses

Here is a summary of the effect of Vested Gains and Losses in various situations.

Vested Gain	A Vested Gain increases the Indexed Strategy value.	If you take a withdrawal, the Investment Base will be reduced by less than the actual amount of the withdrawal and any charge because of the Vested Gain.
Vested Loss	A Vested Loss reduces the Indexed Strategy value.	If you take a withdrawal, the Investment Base will be reduced by more than the actual amount of the withdrawal and any charge because of the Vested Loss.
Additional Information	Any change in an Indexed Strategy value will affect the Account Value, which is used to determine the Surrender Value, the Annuity Payout Value and the Death Benefit Value.	If you take a withdrawal, you will receive the amount you requested and the Indexed Strategy value will be reduced by the amount of the withdrawal and the related Early Withdrawal Charge.

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Examples - Impact of Withdrawals on Indexed Strategy Values

These examples are intended to show you how a withdrawal from an Indexed Strategy before the end of the Term affects the Indexed Strategy values and Vested Gains and Losses at the end of the Term. These examples assume that you allocate your entire $50,000 Purchase Payment to the S&P 500 Growth Strategy. To simplify the examples, we assume that the stated withdrawal amounts include applicable Early Withdrawal Charges.

Example A: Withdrawal When Index Rising Steadily

Impact of $10,000 Withdrawal in Month 4 of Term
Investment Base at Term Start	$50,000
Index Value at Term Start	1000
Index Value at Date of Withdrawal	1040
Positive Index Change	(1040 - 1000) / 1000 = 4%
Maximum Gain	Gain of 12%
Positive Index Change Limited by Maximum Gain	4%
Vesting Factor in Month 4	25%
Vested Gain as a Percentage	4% x 25% = 1% Vested Gain
Vested Gain in Dollars	$50,000 x 1% = $500 Vested Gain
Strategy Value before Withdrawal	$50,000 + $500 = $50,500
Percentage Reduction in Strategy Value	$10,000 / $50,500 = 19.80%
Proportional Reduction in Investment Base	$50,000 x .1980 = $9,901
Remaining Investment Base after Withdrawal	$50,000 - $9,901 = $40,099

Value at End of Term
Remaining Investment Base after Withdrawal	$40,099
Index Value at Term Start	1000
Index Value at Term End	1130
Positive Index Change	(1130 - 1000) / 1000 = 13%
Maximum Gain	Gain of 12%
Positive Index Change Limited by Maximum Gain	12%
Vesting Factor at Term End	100%
Vested Gain as a Percentage	12% x 100% = 12% Vested Gain
Vested Gain in Dollars	$40,099 x 12% = $4,812 Vested Gain
Strategy Value at Term End	$40,099 + $4,812 = $44,911

In this example, the amount you realized on your $50,000 investment at the end of the Term is $54,911 ($10,000 withdrawal plus the $44,911 Strategy value at the end of the Term).

Had no withdrawal occurred, your Strategy value at the end of the Term would have been $56,000 ($50,000 investment base plus $6,000 gain ($50,000 x 12%)).

This hypothetical Strategy value of $56,000 exceeds the amount realized of $54,911 because:

• the gain at the time of the withdrawal caused the reduction in the investment base to be less than the actual amount withdrawn ($10,000 - $9,901 = $99); and

• the subsequent gain at the term end was calculated on a smaller investment base, which caused that gain to be smaller than the hypothetical gain ($4,812 - $6,000 = -$1,188).

The result ($99 - $1,188 = -$1,089) is equal to the difference between the hypothetical Strategy value and the amount realized ($56,000 - $1,089 = $54,911).

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Example B: Withdrawal When Index Falls and Then Rises

Impact of $10,000 Withdrawal in Month 4 of Term
Investment Base at Term Start	$50,000
Index Value at Term Start	1000
Index Value at Date of Withdrawal	880
Negative Index Change	(880 - 1000) / 1000 = -12%
Maximum Loss	Loss of 10%
Negative Index Change Limited by Maximum Loss	-10%
Vested Loss as a Percentage	-10% x 100% = 10% Vested Loss
Vested Loss in Dollars	$50,000 x 10% = $5,000 Vested Loss
Strategy Value before Withdrawal	$50,000 - $5,000 = $45,000
Percentage Reduction in Strategy Value	$10,000 / $45,000 = 22.22%
Proportional Reduction in Investment Base	$50,000 x 22.22% = $11,111
Remaining Investment Base after Withdrawal	$50,000 - $11,111 = $38,889

Value at End of Term
Remaining Investment Base after Withdrawal	$38,889
Index Value at Term Start	1000
Index Value at Term End	1130
Positive Index Change	(1130 - 1000) / 1000 = 13%
Maximum Gain	Gain of 12%
Positive Index Change Limited by Maximum Gain	12%
Vesting Factor at Term End	100%
Vested Gain as a Percentage	12% x 100% = 12% Vested Gain
Vested Gain in Dollars	$38,889 x 12% = $4,667 Vested Gain
Strategy Value at Term End	$38,889 + $4,667 = $43,556

In this example, the amount you realized on your $50,000 investment at the end of the Term is $53,556 ($10,000 withdrawal plus the $43,556 Strategy value at the end of the Term).

Had no withdrawal occurred, your Strategy value at the end of the Term would have been $56,000 ($50,000 investment base plus $6,000 gain ($50,000 x 12%)).

This hypothetical Strategy value of $56,000 exceeds the amount realized of $53,556 because:

• the loss at the time of the withdrawal caused the reduction in the investment base to be greater than the actual amount withdrawn ($10,000 - $11,111 = -$1,111); and

• the subsequent gain at the term end was calculated on a smaller investment base, which caused that gain to be smaller than the hypothetical gain ($4,667 - $6,000 = -$1,333).

The result (-$1,111 + -$1,333 = -$2,444) is equal to the difference between the hypothetical Strategy value and the amount realized ($56,000 - $2,444 = $53,556).

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Example C: Withdrawal When Index Falling Steadily

Impact of $10,000 Withdrawal in Month 4 of Term
Investment Base at Term Start	$50,000
Index Value at Term Start	1000
Index Value at Date of Withdrawal	980
Negative Index Change	(980 - 1000) / 1000 = -2%
Maximum Loss	Loss of 10%
Negative Index Change Limited by Maximum Loss	-2%
Vested Loss as a Percentage	-2% x 100% = 2% Vested Loss
Vested Loss in Dollars	$50,000 x 2% = $1,000 Vested Loss
Strategy Value before Withdrawal	$50,000 - $1,000 = $49,000
Percentage Reduction in Strategy Value	$10,000 / $49,000 = 20.41%
Proportional Reduction in Investment Base	$50,000 x .2041 = $10,204
Remaining Investment Base after Withdrawal	$50,000 - $10,204 = $39,796

Value at End of Term
Remaining Investment Base after Withdrawal	$39,796
Index Value at Term Start	1000
Index Value at Term End	860
Negative Index Change	(860 - 1000) / 1000 = -14%
Maximum Loss	Loss of 10%
Negative Index Change Limited by Maximum Loss	-10%
Vested Loss as a Percentage	-10% x 100% = 10% Vested Loss
Vested Loss in Dollars	$39,796 x 10% = $3,980 Vested Loss
Strategy Value at Term End	$39,796 - $3,980 = $35,816

In this example, the amount you realized on your $50,000 investment at the end of the Term is $45,816 ($10,000 withdrawal plus the $35,816 Strategy value at the end of the Term).

Had no withdrawal occurred, your Strategy value at the end of the Term would have been $45,000 ($50,000 investment base minus $5,000 loss ($50,000 x -10%)).

The amount realized of $45,816 exceeds this hypothetical Strategy value of $45,000 because:

• the loss at the time of the withdrawal caused the reduction in the investment base to be greater than the actual amount withdrawn ($10,000 - $10,204 = -$204); and

• the subsequent loss at the term end was calculated on a smaller investment base, which caused that loss to be smaller than the hypothetical loss ($5,000 - $3,890 = $1,020).

The result ($1,020 - $204 = $816) is equal to the difference between the amount realized and the hypothetical Strategy value ($45,816 - $816 = $45,000).

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Example D: Withdrawal When Index Rises and Then Falls

Impact of $10,000 Withdrawal in Month 4 of Term
Investment Base at Term Start	$50,000
Index Value at Term Start	1000
Index Value at Date of Withdrawal	1080
Positive Index Change	(1080 - 1000) / 1000 = 8%
Maximum Gain	Gain of 12%
Positive Index Change Limited by Maximum Gain	8%
Vesting Factor in Month 4	25%
Vested Gain as a Percentage	8% x 25% = 2% Vested Gain
Vested Gain in Dollars	$50,000 x 2% = $1,000 Vested Gain
Strategy Value before Withdrawal	$50,000 + $1,000 = $51,000
Percentage Reduction in Strategy Value	$10,000 / $51,000 = 19.61%
Proportional Reduction in Investment Base	$50,000 x .1961 = $9,805
Remaining Investment Base after Withdrawal	$50,000 - $9,805 = $40,195

Value at End of Term
Remaining Investment Base after Withdrawal	$40,195
Index Value at Term Start	1000
Index Value at Term End	860
Negative Index Change	(860 - 1000) / 1000 = -14%
Maximum Loss	Loss of 10%
Negative Index Change Limited by Maximum Loss	-10%
Vested Loss as a Percentage	-10% x 100% = 10% Vested Loss
Vested Loss in Dollars	$40,195 x 10% = $4,020 Vested Loss
Strategy Value at Term End	$40,195 - $4,020 = $36,175

In this example, the amount you realized on your $50,000 investment at the end of the Term is $46,175 ($10,000 withdrawal plus the $36,175 Strategy value at the end of the Term).

Had no withdrawal occurred, your Strategy value at the end of the Term would have been $45,000 ($50,000 investment base minus $5,000 loss ($50,000 x -10%)).

The amount realized of $46,175 exceeds this hypothetical Strategy value of $45,000 because:

• the gain at the time of the withdrawal caused the reduction in the investment base to be less than the actual amount withdrawn ($10,000 - $9,805 = $195); and

• the subsequent loss at the term end was calculated on a smaller investment base, which caused that loss to be smaller than the hypothetical loss ($5,000 - $4,020 = $980).

The result ($195 + $980 = $1,175) is equal to the difference between the amount realized and the hypothetical Strategy value ($46,175 - $1,175 = $45,000).

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Example E: Multiple Withdrawals in a Volatile Market

Impact of $2,500 Withdrawal in Month 4 of Term
Investment Base at Term Start	$50,000
Index Value at Term Start	1000
Index Value at Date of Withdrawal	1040
Positive Index Change	(1040 - 1000) / 1000 = 4%
Maximum Gain	Gain of 12%
Positive Index Change Limited by Maximum Gain	4%
Vesting Factor in Month 4	25%
Vested Gain as a Percentage	4% x 25% = 1% Vested Gain
Vested Gain in Dollars	$50,000 x 1% = $500 Vested Gain
Strategy Value before Withdrawal	$50,000 + $500 = $50,500
Percentage Reduction in Strategy Value	$2,500 / $50,500 = 4.95%
Proportional Reduction in Investment Base	$50,000 x .0495 = $2,475
Remaining Investment Base after Month 4 Withdrawal	$50,000 - $2,475 = $47,525

Impact of $3,500 Withdrawal in Month 6 of Term
Remaining Investment Base after Month 4 Withdrawal	$47,525
Index Value at Term Start	1000
Index Value at Date of Withdrawal	970
Negative Index Change	(970 - 1000) / 1000 = -3%
Maximum Loss	Loss of 10%
Negative Index Change Limited by Maximum Loss	-3%
Vested Loss as Percentage	-3% x 100% = 3% Vested Loss
Vested Loss in Dollars	$47,525 x 3% = $1,426 Vested Loss
Strategy Value before Withdrawal	$47,525 - $1,426 = $46,099
Percentage Reduction in Strategy Value	$3,500 / $46,099 = 7.59%
Proportional Reduction in Investment Base	$47,525 x .0759 = $3,607
Remaining Investment Base after Month 6 Withdrawal	$47,525 - $3,607 = $43,918

Impact of $4,000 Withdrawal in Month 8 of Term
Remaining Investment Base after Month 6 Withdrawal	$43,918
Index Value at Term Start	1000
Index Value at Date of Withdrawal	1150
Positive Index Change	(1150 - 1000) / 1000 = 15%
Maximum Gain	Gain of 12%
Positive Index Change Limited by Maximum Gain	12%
Vesting Factor in Month 8	50%
Vested Gain as a Percentage	12% x 50% = 6% Vested Gain
Vested Gain in Dollars	$43,918 x 6% = $2,635 Vested Gain
Strategy Value before Withdrawal	$43,918 + $2,635 = $46,553
Percentage Reduction in Strategy Value	$4,000 / $46,553 = 8.59%
Proportional Reduction in Investment Base	$43,918 x .0859 = $3,773
Remaining Investment Base after Month 8 Withdrawal	$43,918 - $3,773 = $40,145

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Value at End of Term
Remaining Investment Base after Month 8 Withdrawal	$40,145
Index Value at Term Start	1000
Index Value at Term End	860
Negative Index Change	(860 - 1000) / 1000 = -14%
Maximum Loss	Loss of 10%
Negative Index Change Limited by Maximum Loss	-10%
Vested Loss as a Percentage	-10% x 100% = 10% Vested Loss
Vested Loss in Dollars	$40,145 x 10% = $4,015 Vested Loss
Strategy Value at Term End	$40,145 - $4,015 = $36,130

In this example, the amount you realized on your $50,000 investment at the end of the Term is $46,130 ($10,000 total withdrawal plus the $36,130 Strategy value at the end of the Term).

Had no withdrawal occurred, your Strategy value at the end of the Term would have been $45,000 ($50,000 investment base minus $5,000 loss ($50,000 x -10%)).

The amount realized of $46,130 exceeds this hypothetical Strategy value of $45,000 because:

• the gains at the time of the $2,500 and $4,000 withdrawals caused the reductions in the investment base to be less than the actual amounts withdrawn ($2,500 - $2,475 = $25 and $4,000 - $3,773 = $227);

• the loss at the time of the $3,500 withdrawal caused the reduction in the investment base to be greater than the actual amount withdrawn ($3,500 - $3,607 = -$107); and

• the subsequent loss at the term end was calculated on a smaller investment base, which caused that loss to be less than the hypothetical loss ($5,000 - $4,015 = $985).

The result ($25 + $227 - $107 + $985 = $1,130) is equal to the difference between the amount realized and the hypothetical Strategy value ($46,130 - $1,130 = $45,000).

Strategy Renewals and Reallocations at Term End

Renewals

At the end of each Term of a given Crediting Strategy, we will apply the ending value of that Strategy to a new Term of that same Strategy. The amount applied to a new Term of the same Strategy will not include any amount that is moved to a different Strategy as part of a reallocation at the Term end.

Reallocations

At the end of a Term, you may reallocate the ending values of the Crediting Strategies for that Term among the available Strategies. You can only reallocate amounts from one Crediting Strategy to another at the end of the Term for which such amount is being held. You cannot make a reallocation at any other time.

We will send you written notice at least 30 days before the end of a Term to provide you with the opportunity to make a reallocation. We must receive your Request in Good Order for a reallocation on or before the last day of the Term. For example, if the end of a Term falls on a weekend, we must receive your request on the last Market Day before that weekend.

Limitations

Reallocations must be in whole percentages that total 100%. We reserve the right to round amounts up or down to make whole percentages, and to reduce or increase amounts proportionally in order to total 100%.

Any renewal or reallocation will be subject to Strategy availability, minimums and maximums. Currently there are no limitations on the amounts that may be applied to a Crediting Strategy. We may establish minimum and maximum amounts or percentages that may be applied to a given Crediting Strategy for any future Term in our discretion. We will notify you of any such minimum or maximum.

The new Term of each Strategy is subject to the Declared Rate or Maximum Gain in effect for that Strategy for that new Term. For example, the Declared Rate for a new Term of the Declared Rate Strategy may be different than the Declared Rate for the

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Term that is ending. Likewise, the Maximum Gain for an Indexed Strategy for a new Term may be different than the Maximum Gain for that Indexed Strategy for the Term that is ending.

Availability of Strategies

At the end of a Term, we may eliminate a particular Strategy in our discretion. We will send you a written notice at least 30 days before the end of each Term with information about the Strategies that will be available for the next Term and the Declared Rate and the Maximum Gains that will apply.

We are not obligated to offer the Declared Rate Strategy or any one particular Indexed Strategy. At the end of a Term, we can add or stop offering any Strategy at our discretion. For example, we could stop offering Growth Strategies after the first seven Contract Years. We may limit the availability of a Strategy for a Term that would extend beyond the Annuity Payout Initiation Date. All Strategies may not be available in all states.

One Indexed Strategy will always be available. If the Declared Rate Strategy is no longer available, then we must offer an Indexed Strategy that has a Maximum Loss of 0%. Unlike a Declared Rate Strategy, no earnings are guaranteed for an Indexed Strategy.

If we add or stop offering a Strategy at the end of a Term, we will send you a notification. If funds are held in a Strategy that will no longer be available after the end of a Term, the funds will remain in that Strategy until the end of that Term.

If you have allocated money to an Indexed Strategy and that Indexed Strategy will not be available for the next Term, then the Bailout right will apply. In this case, you may withdraw money from that Indexed Strategy at the end of the current Term without incurring an Early Withdrawal Charge. If you have allocated money to the Declared Rate Strategy and it will not be available for the next Term, the Bailout right will not apply.

Reallocations to Default Strategies

At the end of a Term, to the extent any amount that cannot be applied to a given Crediting Strategy for the next Term because that Strategy is no longer available or the amount is under the minimum or over the maximum for that Strategy for the new Term, we will reallocate the amount to a default Strategy.

Here are the rules that will apply to reallocations to a default Strategy.

• We will reallocate to the Declared Rate Strategy.

• If no Declared Rate Strategy is available, then we will designate an Indexed Strategy that has a Maximum Loss of 0% and we will reallocate to that designated Strategy.

If the amount to be applied exceeds the maximum, then the default reallocation rules will apply only to the excess amount. For example, if the maximum amount for a Crediting Strategy is $50,000 and the amount to be applied is $54,000, then the default reallocation rules will apply only to the excess $4,000.

Cash Benefit

Surrender

You may Surrender your Contract at any time before the earlier of: (1) the Annuity Payout Initiation Date; or (2) a death for which a Death Benefit is payable. The right to Surrender may be restricted if your Contract is purchased under an employer plan subject to IRC Section 401 (pension, profit sharing, and 401(k) plans), IRC Section 403(b) (tax-sheltered annuity plans), or IRC Section 457(b) (governmental deferred compensation plans).

A Surrender must be made by a Request in Good Order. The amount paid upon Surrender is the Surrender Value. If you Surrender your Contract, the Contract terminates.

Withdrawals

You may take a withdrawal from your Contract at any time before the earliest of: (1) the Annuity Payout Initiation Date; (2) a death for which a Death Benefit is payable; or (3) the date that this Contract is Surrendered. The right to withdraw may be restricted if your Contract is purchased under an employer plan subject to IRC Section 401 (pension, profit sharing, and 401(k) plans), IRC Section 403(b) (tax-sheltered annuity plans), or IRC Section 457(b) (governmental deferred compensation plans).

A withdrawal must be made by a Request in Good Order. The amount of any withdrawal must at least $500. If the withdrawal would reduce the Account Value to less than the minimum value of $5,000, we will treat the withdrawal request as a request to withdraw the maximum amount that may be taken without reducing your Account Value to less than $5,000.

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We will withdraw funds from your Account Value as of the date on which we receive your Request in Good Order or any later specified effective date. Unless you instruct us otherwise by a Request in Good Order prior to the date of the withdrawal, a withdrawal will be taken in the following order:

• first proportionally from funds that then qualify for a waiver of the Early Withdrawal Charge pursuant to the Bailout right;

• then from the Purchase Payment Account;

• then proportionally from the Declared Rate Strategies until all Declared Rate Strategies are exhausted; and

• then proportionally from Indexed Strategies.

Effect of Withdrawals

A withdrawal reduces the Account Value, which in turn reduces the amount payable upon Surrender, applied to the Annuity Payout Benefit, or payable as the Death Benefit.

If an Early Withdrawal Charge applies to your withdrawal, you will receive the amount that you requested, and your Account Value will be reduced by the amount you receive plus the amount needed to pay the Early Withdrawal Charge. A withdrawal from an Indexed Strategy other than at the end of a Term also reduces the Investment Base used to calculate the Vested Gain or Loss for the Term. The reduction in the Investment Base for a withdrawal and any related Early Withdrawal Charge is proportional to the reduction in the Account Value. See Vested Gains and Lossessection above.

Automatic Withdrawals

You may elect to automatically withdraw money from your Contract under any automatic withdrawal program that we offer. Your Account Value must be at least $10,000 in order to make an automatic withdrawal election. The minimum amount of each automatic withdrawal payment is $100. Automatic withdrawals will be taken from the Purchase Payment Account and Strategies of your Contract in the same order as any other withdrawal.

Subject to the terms and conditions of the automatic withdrawal program, you may begin or discontinue automatic withdrawals at any time. You must give us at least 30 days’ notice to change any automatic withdrawal instructions that are currently in place. Any request to begin, discontinue or change automatic withdrawals must be a Request in Good Order. We reserve the right to discontinue offering automatic withdrawals at any time.

Currently, we do not charge a fee to participate in an automatic withdrawal program. However, we reserve the right to impose an annual fee in such amount as we may then determine to be reasonable for participation in the automatic withdrawal program. If imposed, the fee will not exceed $30 annually.

Before electing an automatic withdrawal, you should consult with a financial advisor. Automatic withdrawals are similar to starting Annuity Payout Benefit payments, but will result in different taxation of payments and potentially a different amount of total payments over the life of your Contract. Automatic withdrawals will reduce the amount available under the Free Withdrawal Allowance described below. Unless a waiver applies, an Early Withdrawal Charge may apply to an automatic withdrawal during the Early Withdrawal Charge period.

Exchanges, Transfers, and Rollovers

An amount paid on a withdrawal or surrender may be paid to or for another annuity or tax-qualified account in a tax-free exchange, transfer, or rollover to the extent allowed by federal tax law.

Example F: Amount Available for a Withdrawal When Index Rises

This example assumes:

• you allocate your entire $50,000 Purchase Payment to the S&P 500 Growth Strategy;

• the Contract Effective Date and the Term Start Date are both April 6, 2018;

• the Maximum Gain for the initial Term of the S&P 500 Growth Strategy is 12%;

• you request a $10,000 withdrawal on August 1, 2018;

• you do not take any other withdrawals during the initial Term; and

• the Term End Date is April 6, 2019.

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Term Start Date	April 6, 2018
Strategy Value	$50,000		See Footnote 1 below.
Investment Base	$50,000		See Footnote 1 below.
Maximum Gain for Term	Gain of 12%		See Footnote 2 below.
Index Value	1900
Withdrawal Date	August 1, 2018
Index Value	1976
Positive Index Change	4	%	See Footnote 3 below.
Positive Index Change Limited by Maximum Gain	4	%	See Footnote 4 below.
Vesting Factor in Month 4	25	%	See Footnote 5 below.
Vested Gain as a Percentage	1	%	See Footnote 6 below.
Vested Gain	$500		See Footnote 6 below.
Strategy Value before Withdrawal	$50,500		See Footnote 7 below.
Amount of Withdrawal Requested	$10,000
Free Withdrawal Allowance	$5,000		See Footnote 8 below.
Early Withdrawal Charge	$435		See Footnote 9 below.
Total Amount Withdrawn	$10,435		See Footnote 10 below.
Percentage Reduction in Strategy Value	20.66	%	See Footnote 11 below.
Proportional Reduction in Investment Base	$10,332		See Footnote 11 below.
Remaining Investment Base after Withdrawal	$39,668		See Footnote 12 below.
Strategy Value after Withdrawal	$40,065		See Footnote 13 below.
Term End Date	April 6, 2019
Index Value	2033
Positive Index Change	7	%	See Footnote 14 below.
Positive Index Change Limited by Maximum Gain	7	%	See Footnote 15 below.
Vesting Factor at Term End	100	%	See Footnote 16 below.
Vested Gain as a Percentage	7	%	See Footnote 17 below.
Remaining Investment Base after Withdrawal	$39,668		See Footnote 12 below.
Vested Gain	$2,777		See Footnote 17 below.
Strategy Value at Term End	$42,445		See Footnote 18 below.

Footnote 1. On the Term Start Date, the Strategy value is equal to the amount applied to the Strategy on the Term Start Date. The amount applied on the Term Start Date is also the beginning Investment Base.

Footnote 2. The Maximum Gain is the largest positive Index Change for a Term taken into account to determine the Vested Gain. In this example, the Maximum Gain is 12%, which means it will not affect the calculation of Vested Gain unless the Index goes up more than 12%.

Footnote 3. The Index Change is equal to the percentage change in the Index Value measured from the Term Start Date to the withdrawal date.

Formula	(Index Value on withdrawal date - Index Value on Term Start Date) / Index Value on Term Start Date
Calculation	(1976 - 1900) / 1900 = 4%

Footnote 4. In this example, the Index Change on the withdrawal date is not limited by the Maximum Gain because the Index did not go up more than 12%.

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Footnote 5. A Vesting Factor limits the portion of a positive Index Change that is taken into account to determine the Vested Gain. The Vesting Factor for a positive Index Change varies depending on the day of the Term. The Vesting Factor for a positive Index Change on any date within the first six months of a Term is 25%. The Vesting Factor for a positive Index Change on any date within the final six months of a Term (but before the Final Market Day of the Term) is 50%. The Vesting Factor for a positive Index Change on the final Market Day of the Term (or any date after that when the Vested Gain for the Term is calculated) is 100%. In this example, the Vesting Factor is 25% because the withdrawal date is a date within the first six months of the Term.

Footnote 6. When there is a positive Index Change, we use the following formulas to calculate the Vested Gain.

Formula	Index Change limited by Maximum Gain x Vesting Factor = Vested Gain percentage
Calculation	4% x 25% = 1%
Formula	Remaining Investment Base for the current Term x Vested Gain percentage = Vested Gain in dollars
Calculation	$50,000 x 0.01 = $500

Footnote 7. In this example, there is a Vested Gain on the withdrawal date and you have not taken any withdrawals before that date. This means the Strategy value on the withdrawal date is the Investment Base plus the Vested Gain as of that date.

Formula	Investment Base + Vested Gain = Strategy value
Calculation	$50,000 + $500 = $50,500

Footnote 8. The Free Withdrawal Allowance (FWA) for the first Contract Year is 10% of the Purchase Payment. The FWA for each subsequent Contract Year is 10% of the Account Value as of the most recent Contract Anniversary.

Formula	Purchase Payment x 10% = FWA for first Contract Year
Calculation	$50,000 x 0.10 = $5,000

Footnote 9. The Early Withdrawal Charge that would apply to your withdrawal is equal to the amount subject to the charge multiplied by the Early Withdrawal Charge rate (EWC rate). The amount subject to the charge includes the charge itself. The amount subject to the charge does not include the FWA. The EWC rate depends on the Contract Year. In this example, the withdrawal occurs in the first Contract Year, when the EWC rate is 8%. The Early Withdrawal Charge rate declines after each of the first seven Contract Years. There is no Early Withdrawal Charge after Contract Year 7.

Formula	[(Requested withdrawal - FWA) x EWC rate] / (1.00 - EWC rate) = Early Withdrawal Charge
Calculation	[($10,000 - $5,000) x 0.08] / (1.00 - 0.08) = $5,000 x 0.08 / 0.92 = $400 / 0.92 = $435

Footnote 10. When you request a withdrawal, you receive the amount you requested. If an Early Withdrawal Charge applies, we also withdraw an amount equal to the charge. This means that the total amount withdrawn from your annuity is equal to the amount you requested plus the applicable Early Withdrawal Charge.

Formula	Requested withdrawal + Early Withdrawal Charge = total amount withdrawn
Calculation	$10,000 + $435 = $10,435

Footnote 11. When you take a withdrawal, the portion of the Investment Base taken to pay for the withdrawal is proportional to the reduction in the value of the Indexed Strategy due to the withdrawal. If there is a Vested Gain as of the withdrawal date, the reduction in the Investment Base will be less than the total amount withdrawn. This difference occurs because your withdrawal is credited with a proportionate share of the Vested Gain.

Formula	Total amount withdrawn / Strategy value before withdrawal = percentage reduction in Strategy value
Calculation	$10,435 / $50,500 = 20.66%
Formula	Investment Base before withdrawal x percentage reduction in Strategy value = proportional reduction in Investment Base
Calculation	$50,000 x 0.2066 = $10,332

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Footnote 12. On the withdrawal date after the withdrawal, the remaining Investment Base is equal to the Investment Base before the withdrawal minus the proportional reduction in the Investment Base for the withdrawal.

Formula	Investment Base before withdrawal - proportional reduction in Investment Base for withdrawal = Investment Base after withdrawal
Calculation	$50,000 - $10,332 = $39,668

Footnote 13. On the withdrawal date, the Strategy value after the withdrawal is equal to Strategy value before the withdrawal minus the total amount withdrawn.

Formula	Strategy value before withdrawal - total amount withdrawn = Strategy value after withdrawal
Calculation	$50,500 - $10,435 = $40,065

Footnote 14. The Index Change on the Term End Date is equal to the percentage change in the Index Value measured from the Term Start Date to the Term End Date.

Formula	(Index Value on Term End Date - Index Value on Term Start Date) / Index Value on Term Start Date
Calculation	(2033 - 1900) / 1900 = 7%

Footnote 15. In this example, the Index Change on the Term End Date is not limited by the Maximum Gain because the Index did not go up more than 12%.

Footnote 16. The Vesting Factor for a positive Index Change on the Term End Date is 100%.

Footnote 17. When there is a positive Index Change, we use the following formulas to calculate the Vested Gain.

Formula	Index Change limited by Maximum Gain x Vesting Factor = Vested Gain percentage
Calculation	7% x 100% = 7%

Footnote 18. In this example, there is a Vested Gain on the Term End Date and you have taken a $10,000 withdrawal during the Term. This means the Strategy value on that date is the remaining Investment Base on the Term End Date plus the Vested Gain as of that date.

Formula	Remaining Investment Base on Term End Date + Vested Gain = Strategy value on Term End Date
Calculation	$39,668 + $2,777 = $42,445

Footnote 19. In this example, there is a Vested Index Gain on the Term End Date and you have taken a $10,000 withdrawal during the Term. This means the Strategy Value on that date is the Investment Base on the Term End Date plus the adjustment for the Vested Index Gain as of that date.

Formula	Investment Base + Vested Index Gain = Strategy Value
Calculation	$39,668 + $2,777 = $42,445

Example G: Amount Available for a Withdrawal When Index Falls

This example assumes:

• you allocate your entire $50,000 Purchase Payment to the S&P 500 Growth Indexed Strategy;

• the Contract Effective Date and the Term Start Date are both April 6, 2018;

• you request a $10,000 withdrawal on August 1, 2018;

• you do not take any other withdrawals during the initial Term; and

• the Term End Date is April 6, 2019.

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Term Start Date	April 6, 2018
Strategy Value	$50,000		See Footnote 1 below.
Investment Base	$50,000		See Footnote 1 below.
Maximum Loss	Loss of 10%		See Footnote 2 below.
Index Value	1900
Withdrawal Date	August 1, 2018
Index Value	1786
Negative Index Change	-6%		See Footnote 3 below.
Negative Index Change Limited by Maximum Loss	-6%		See Footnote 4 below.
Vested Loss Percentage	-6%		See Footnote 5 below.
Vested Loss	-$3,000		See Footnote 5 below.
Strategy Value before Withdrawal	$47,000		See Footnote 6 below.
Amount of Withdrawal Requested	$10,000
Free Withdrawal Allowance	$5,000		See Footnote 7 below.
Early Withdrawal Charge	$435		See Footnote 8 below.
Total Amount Withdrawn	$10,435		See Footnote 9 below.
Percentage Reduction in Strategy Value	22.2	%	See Footnote 10 below.
Proportional Reduction in Investment Base	$11,101		See Footnote 10 below.
Remaining Investment Base after Withdrawal	$38,899		See Footnote 11 below.
Strategy Value after Withdrawal	$36,565		See Footnote 12 below.
Term End Date	April 6, 2019
Index Value	1748
Negative Index Change	-8%		See Footnote 13 below.
Negative Index Change Limited by Maximum Loss	-8%		See Footnote 14 below.
Vested Loss Percentage	-8%		See Footnote 15 below.
Remaining Investment Base	$38,899		See Footnote 11 below.
Vested Loss	-$3,112		See Footnote 15 below.
Strategy Value at Term End	$35,787		See Footnote 16 below.

Footnote 1. On the Term Start Date, the Strategy value is equal to the amount applied to the Strategy on the Term Start Date. The amount applied on the Term Start Date is also the beginning Investment Base.

Footnote 2. The Maximum Loss is the largest negative Index Change for a Term taken into account to determine the Vested Loss. In this example, the Maximum Loss is 10%, which means it will not affect the calculation of Vested Loss unless the Index goes down more than 10%.

Footnote 3. The Index Change is equal to the percentage change in the Index Value measured from the Term Start Date to the withdrawal date.

Formula	(Index Value on withdrawal date - Index Value on Term Start Date) / Index Value on Term Start Date
Calculation	(1786 - 1900) / 1900 = -6%

Footnote 4. In this example, the Index Change on the withdrawal date is not limited by the Maximum Loss because the Index did not go down more than 10%.

Footnote 5. When there is a negative Index Change, we use the following formulas to calculate the Vested Loss.

Formula	Index Change limited by Maximum Loss = Vested Loss percentage
Calculation	-6% = -6%
Formula	Vested Loss percentage x remaining Investment Base for the current Term = Vested Loss in dollars
Calculation	$50,000 x -0.06 = -$3,000

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Footnote 6. In this example, there is a Vested Loss on the withdrawal date and you have not taken any withdrawals before that date. This means the Strategy value on the withdrawal date is the Investment Base, minus the Vested Loss as of that date.

Formula	Investment Base - Vested Loss = Strategy value
Calculation	$50,000 - $3,000 = $47,000

Footnote 7. The Free Withdrawal Allowance (FWA) for the first Contract Year is 10% of the Purchase Payment. The FWA for each subsequent Contract Year is 10% of the Account Value as of the most recent Contract Anniversary.

Formula	Purchase Payment x 10% = FWA for first Contract Year
Calculation	$50,000 x 10% = $5,000

Footnote 8. The Early Withdrawal Charge that would apply to your withdrawal is equal to the amount subject to the charge multiplied by the Early Withdrawal Charge rate (EWC rate). The amount subject to the charge includes the charge itself. The amount subject to the charge does not include the FWA. The EWC rate depends on the Contract Year. In this example, the withdrawal occurs in the first Contract Year, when the EWC rate is 8%. The Early Withdrawal Charge rate declines after each of the first seven Contract Years. There is no Early Withdrawal Charge after Contract Year 7.

Formula	[(Requested withdrawal - FWA) x EWC rate] / (1.00 - EWC rate) = Early Withdrawal Charge
Calculation	[($10,000 - $5,000) x 0.08] / (1.00 - 0.08) = $5,000 x 0.08 / 0.92 = $400 / 0.92 = $435

Footnote 9. When you request a withdrawal, you receive the amount you requested. If an Early Withdrawal Charge applies, we also withdraw an amount equal to the charge. This means that the total amount withdrawn from your annuity is equal to the amount you requested plus the applicable Early Withdrawal Charge.

Formula	Requested withdrawal + Early Withdrawal Charge = total amount withdrawn
Calculation	$10,000 + $435 = $10,435

Footnote 10. When you take a withdrawal, the portion of the Investment Base taken to pay for the withdrawal is proportional to the reduction in the value of the Indexed Strategy due to the withdrawal. If there is a Vested Loss as of the withdrawal date, the reduction in the Investment Base will be more than the total amount withdrawn. This difference occurs because your withdrawal is charged with a proportionate share of the Vested Loss.

Formula	total amount withdrawn / Strategy value before withdrawal = percentage reduction in Strategy value
Calculation	$10,435 / $47,000 = 22.20%
Formula	Investment Base before withdrawal x percentage reduction in Strategy value = proportional reduction in Investment Base
Calculation	$50,000 x 0.2220 = $11,101

Footnote 11. On the withdrawal date, the remaining Investment Based after the withdrawal is equal to the Investment Base before the withdrawal minus the proportional reduction in the Investment Base for the withdrawal.

Formula	Investment Base before withdrawal - proportional reduction in Investment Base for withdrawal = Investment Base after withdrawal
Calculation	$50,000 - $11,101 = $38,899

Footnote 12.On the withdrawal date, the Strategy value after the withdrawal is equal to the Strategy value before the withdrawal minus the total amount withdrawn.

Formula	Strategy value before withdrawal - total amount withdrawn = Strategy value after withdrawal
Calculation	$47,000 - $10,435 = $36,565

Footnote 13. The Index Change on the Term End Date is equal to the percentage change in the Index Value measured from the Term Start Date to the Term End Date.

Formula	(Index Value on Term End Date - Index Value on Term Start Date) / Index Value on Term Start Date
Calculation	(1748 - 1900) / 1900 = -8%

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Footnote 14. In this example, the Index Change on the Term End Date is not limited by the Maximum Loss because the Index did not go down more than 10%.

Footnote 15. When there is a negative Index Change, we use the following formula to calculate the Vested Loss percentage.

Formula	Index Change limited by Maximum Loss = Vested Loss percentage
Calculation	-8% = -8%
Formula	Remaining Investment Base for the current Term x Vested Loss percentage = Vested Loss in dollars
Calculation	$38,899 x -0.08 = -$3,112

Footnote 16. In this example, there is a Vested Loss on the Term End Date and you have taken a $10,000 withdrawal during the Term. This means the Strategy value on that date is the remaining Investment Base on the Term End Date minus the Vested Loss as of that date.

Formula	Remaining Investment Base on Term End Date - Vested Loss = Strategy value
Calculation	$38,899 - $3,112 = $35,787

Early Withdrawal Charge

We impose an Early Withdrawal Charge to reimburse us for contract sales expenses, including commissions and other distribution, promotion, and acquisition expenses, and to allow us to support higher Declared Rate Strategy interest rates and Indexed Strategy Maximum Gains by investing assets for a longer duration.

The Early Withdrawal Charge applies if, during the first seven Contract Years, you take a withdrawal from your Contract or Surrender it. After that, the Early Withdrawal Charge does not apply.

The Early Withdrawal Charge is equal to the amount that is subject to the charge multiplied by the Early Withdrawal Charge rate.

• If you take a withdrawal from your Contract, the amount subject to the charge is the amount you withdraw plus any amount needed to pay the Early Withdrawal Charge.

• If you Surrender your Contract, the amount subject to the charge is your Account Value.

• The amount subject to the charge will not include: (1) the Free Withdrawal Allowance; (2) the amount, if any, that qualifies under the Bailout right; or (3) the amount, if any, that qualifies for another waiver as described below.

The Early Withdrawal Charge rate depends on how long you own your Contract. The rate schedule is set out below.

Contract Year	1		2		3		4		5		6		7		8+
Early Withdrawal Charge Rate	8	%	7	%	6	%	5	%	4	%	3	%	2	%	0%

Example. You Surrender your annuity in Contract Year 5 when your Account Value is $100,000. You have already used your Free Withdrawal Allowance for the year and no other exception applies. We take an Early Withdrawal Charge of $4,000 ($100,000 x 0.04) and you receive $96,000.

An Early Withdrawal Charge may apply if you take a withdrawal during the first seven Contract Years. That charge will reduce Strategy values, including the value of a Conserve Strategy.

Free Withdrawal Allowance

The Free Withdrawal Allowance lets you withdraw some money from your Contract without the imposition of the Early Withdrawal Charge. For the first Contract Year, the Free Withdrawal Allowance is an amount equal to 10% of the total Purchase Payments received by us. For each subsequent Contract Year, the Free Withdrawal Allowance is equal to 10% of the Account Value as of the most recent Contract Anniversary. The Free Withdrawal Allowance is non-cumulative and you may not carry over any unused portion to other Contract Years.

Example. Your Account Value as of the end of Contract Year 3 is $200,000. Your Free Withdrawal Allowance for Contract Year 4 is $20,000 ($200,000 x 0.10). If you take a withdrawal of $50,000 at the beginning of Contract Year 4, the Early Withdrawal Charge will not apply to the first $20,000 of the withdrawal, but will apply to the remaining $30,000 plus the amount needed to pay the Early Withdrawal Charge. If you take another withdrawal later in Contract Year 4, the Early Withdrawal Charge applies to the entire withdrawal plus the amount needed to pay the Early Withdrawal Charge.

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Early Withdrawal Charge Waivers

Bailout Right. We will waive the Early Withdrawal Charge on amounts that you withdraw from this Contract at the end of a current Term if the amounts are held under an Indexed Strategy for that Term and either:

• the Maximum Gain for the next Term of that Strategy is less than its Bailout Trigger for the current Term; or

• that Strategy will not be available for the next Term.

Each current Term of an Indexed Strategy has its own Bailout Trigger, even if no funds are held under the Indexed Strategy for that Term. If your Contract has multiple Purchase Payments, the Bailout Trigger for one current Term of an Indexed Strategy may be different from the Bailout Trigger for another current Term of the same Indexed Strategy that started on a different date.

The initial Bailout Trigger for each Indexed Strategy is set out in the Indexed Strategy endorsement. It is less than the Maximum Gain that we anticipate setting for the initial Term of that Indexed Strategy.

For each subsequent Term, the Bailout Trigger is the lesser of:

• the Bailout Trigger for the Term that ended on the date the current Term began; or

• the Maximum Gain set for the current Term.

This means that:

• if the Maximum Gain is never set below the Bailout Trigger, then the Bailout Trigger will not change; and

• if the Maximum Gain is ever set below the Bailout Trigger, then the Bailout Trigger will be reduced for the new Term and for each Term that starts on an anniversary of that Term start date.

The Bailout Trigger will never increase from one Term to the next.

Example. The Bailout Trigger for the initial Term of an Indexed Strategy is 6.5%.

• If we set the Maximum Gain for the next Term of that Indexed Strategy at 7.5%, then you will not qualify for a waiver of the Early Withdrawal Charge at the end of the current Term and the Bailout Trigger for that next Term will continue to be 6.5%.

• If we set the Maximum Gain for the next Term of that Indexed Strategy at 5.5%, then you will qualify for a waiver of the Early Withdrawal Charge at the end of the current Term and the Bailout Trigger for that next Term will change to 5.5%.

If this waiver will apply to an Indexed Strategy at the end of a Term, we will notify you in writing at least 30 days before that Term ends. You may elect a withdrawal under the Bailout right by a Request in Good Order. We must receive your request before the end of the applicable Term.

This waiver will only apply to the amount held under the Indexed Strategy for the Term that is ending. It will not apply to amounts then held under a different Strategy, or to amounts held under the same Strategy for a Term ending on a different date. You may not carry over any unused part of the waiver from one Term to the next.

If you withdraw funds that qualify for a waiver under the Bailout right, the withdrawal will reduce the Free Withdrawal Allowance for the applicable Contract Year. For example, if the amount you withdraw that qualifies for a waiver under the Bailout right in Contract Year 4 is more than 10% of your Account Value as of the most recent Contract Anniversary, then no Free Withdrawal Allowance will be available for subsequent withdrawals in Contract Year 4.

Instead of withdrawing amounts that qualify for a waiver under the Bailout right, you may wish to reallocate those amounts to a different Strategy. A Request in Good Order to reallocate funds must be received by us before the end of the applicable Term.

Extended Care Waiver. (Rider form R1462316NW-Waiver of Early Withdrawal Charges for Extended Care Rider). We will waive the Early Withdrawal Charge that would otherwise apply if you make a Request in Good Order and:

• your Contract is modified by the Extended Care Waiver Rider;

• you are confined in a long-term care facility or hospital and the confinement is prescribed by a physician and is medically necessary;

• the first day of the confinement is at least one year after the Contract Effective Date; and

• the confinement has continued for a period of at least 90 consecutive days.

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You must provide us with satisfactory proof that you meet these conditions before the date of the withdrawal or Surrender. There is no charge for this rider, but it may not be available in all states. In California, the Extended Care Waiver Rider has been replaced with the Waiver of Early Withdrawal Charges for Facility Care or Home Care or Community-Based Services Rider, which provides for a waiver of Early Withdrawal Charges under an expanded variety of circumstances. Please see the rider for details.

Terminal Illness Waiver. (Rider form R1462416NW-Waiver of Early Withdrawal Charges Upon Terminal Illness Rider). We will waive the Early Withdrawal Charge that would otherwise apply if you make a Request in Good Order and:

• your Contract is modified by the Waiver of Early Withdrawal Charges upon Terminal Illness Rider;

• you are diagnosed with a terminal illness by a physician and, as a result of the terminal illness, you have a life expectancy of less than 12 months from the date of diagnosis; and

• the diagnosis is rendered by a physician more than one year after the Contract Effective Date.

You must provide us with satisfactory proof that you meet these conditions before the date of the withdrawal or Surrender. There is no charge for this rider, but it may not be available in all states. Please see the rider for details.

State Limitations. In some states, our ability to waive fees or charges may be limited by applicable laws, regulations or administrative positions.

Annuity Payout Benefit

Under the Contract you may receive regular Annuity Payout Benefit payments for the duration of the period that you select. Once Annuity Payout Benefit payments start, you can no longer surrender the Contract or take a withdrawal, no Death Benefit will be payable under your Contract, and your Beneficiary designations will no longer apply. The amount payable after death, if any, is governed by the Payout Option you select.

The Annuity Payout Benefit is payable if the Annuity Payout Initiation Date is reached before the earlier of: (1) a death for which a Death Benefit is payable; or (2) the date that this Contract is Surrendered.

Annuity Payout Initiation Date

The Annuity Payout Initiation Date is the first day of the first payment interval for which payment of the Annuity Payout Benefit is to be made. Annuity Payout Benefit payments are made at the end of each payment interval. This means that for annual payments, the first payment will be made one year after the Annuity Payout Initiation Date.

You may select the Annuity Payout Initiation Date by a Request in Good Order. We must receive your request before the last Market Close on or before the Annuity Payout Initiation Date you selected and at least 30 days before the first Annuity Payout Benefit payment is to be made.

• The earliest Annuity Payout Initiation you may select is the first Contract Anniversary.

• Unless we agree, the latest Annuity Payout Initiation Date you may select is the Contract Anniversary following your 95th birthday or the 95th birthday, of a joint owner, if earlier. If the Owner is not a human being such as a trust or a corporation, then the Annuity Payout Initiation Date may not be later than the Contract Anniversary following the 95th birthday of the eldest Annuitant, unless we agree.

The earliest permitted date and the latest permitted date for the Annuity Payout Initiation Date are set out on your Contract Specifications Page. The latest permitted date may change if an Owner changes.

If you do not select an Annuity Payout Initiation Date by the latest permitted date, we may select it for you. We will notify you in writing at least 45 days before the date we select. We will give you an opportunity to select an earlier date.

Annuity Payout Amount

The amount of each payment under the Annuity Payout Benefit is determined on the Annuity Payout Initiation Date based on the Annuity Payout Value on that date, the Payout Option that applies, and the payment interval.

The Annuity Payout Value is the amount that can be applied to the Annuity Payout Benefit is equal to: (1) the Account Value on the Annuity Payout Initiation Date; minus (2) premium tax or other taxes not previously deducted.

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Form of Annuity Payout Benefit

The Annuity Payout Benefit is paid in the form of annual payments as a Life Payout with Payments for at Least a Fixed Period. That fixed period will be 10 years or, if fewer, the maximum number of whole years permitted by any tax qualification endorsement.

In place of that, you may elect to have the Annuity Payout Benefit paid in any form of Payout Option that is available under your Contract. The available Payout Options are described in the Payout Optionssection below. You may elect a Payout Option by a Request in Good Order. We must receive your request before the last Market Close on or before the Annuity Payout Initiation Date and at least 30 days before the first Annuity Payout Benefit payment is to be made.

Payee for Annuity Payout Benefit

Payment of the Annuity Payout Benefit generally is made to the surviving Owner(s) as the payee(s). In place of that, the surviving Owner(s) may elect for payment to be made as a tax-free exchange, transfer, or rollover, or for payment to be made to the Annuitant. That election must be made by a Request in Good Order that we receive at least 30 days before the payment date.

Payments that become due after the death of the payee are made to:

• the surviving Owner(s); or if none

• then to the surviving contingent payee(s) designated by the surviving Owner(s); or if none;

• the estate of the last payee who received payments.

The portion of any Annuity Payout Benefit remaining after the death of an Owner or Annuitant must be paid at least as rapidly as payments were being made at the time of such death.

You may designate a contingent payee by a Request in Good Order. If you designate your spouse as a contingent payee and your marriage ends before your death, then we will treat your former spouse as having predeceased you except in the following situations: (1) if a court order provides that the former spouse’s rights as a contingent payee are to continue; or (2) if the former spouse remains or becomes an Owner.

Death Benefit

A Death Benefit is payable under your Contract if you die before the Annuity Payout Initiation Date and before the Contract is Surrendered. If your spouse becomes a successor owner of the Contract, no Death Benefit will be payable on account of your death.

When the Owner is a non-natural person, a Death Benefit is payable under the Contract if the Annuitant dies before the Annuity Payout Initiation Date and before the Contract is Surrendered. For this purpose, a non-natural person is a trust, custodial account, corporation, limited liability company, partnership, or other entity.

Only one Death Benefit will be paid under the Contract. If a Death Benefit becomes payable, it will be in place of all other benefits under the Contract, and all other rights under this Contract will terminate except for rights related to the Death Benefit.

Death Benefit Payout Date

• If the Death Benefit is to be paid as a lump sum, then it will be paid as soon as practicable after the receipt of a Request in Good Order for a lump sum payment.

• If the Death Benefit is to be paid under a Payout Option, then we will apply the Death Benefit Value to a Payout Option as soon as practicable after receipt of proof of death and a Request in Good Order. That application date will be the first day of the first payment interval for which a payment is to be made. Death Benefit payments under a Payout Option are made at the end of each payment interval. This means that, for annual payments, the first payment will be made one year after that application date.

Death Benefit Amount

• If the Death Benefit is paid in a lump sum, then it is equal to the Death Benefit Value, increased by any additional post-death interest as required by law.

• If the Death Benefit will be paid as a series of periodic payments under a Payout Option, then the amount of each payment under the Death Benefit is determined on the date that the Death Benefit Value is applied to the Payout Option. The amount or each payment will be based on the Death Benefit Value (increased by any additional post-death interest as required by law to the date it is applied to the Payout Option), the Payout Option that applies, and the payment interval.

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Death Benefit Value

The Death Benefit Value is the greater of:

• the Account Value determined as of the date that the Death Benefit Value is determined; or

• the Purchase Payments, reduced proportionally for all withdrawals, but not including amounts applied to pay Early Withdrawal Charges (the “Purchase Payment base”).

In either case, the Death Benefit Value is reduced by premium tax or other taxes not previously deducted.

The reduction in your Purchase Payment base for withdrawals will be in the same proportion that your Account Value was reduced on the date of the withdrawal. A proportional reduction in your Purchase Payment base could be larger than the dollar amount of your withdrawal.

Example. Here is an example of how we calculate a proportional reduction of your Purchase Payment base. In this example, we assume you take an $8,000 withdrawal. To simplify the example, we also assume no Early Withdrawal Charge, no premium tax is deducted, and no additional post-death interest is added.

	Before Withdrawal	After Withdrawal	Explanation
Account Value	$100,000	$92,000	Your withdrawal reduces your Account Value by $8,000 (which is an 8% reduction in your Account Value). $8,000 / $100,000 = 8%
Purchase Payment Base for Death Benefit	$120,000	$110,400	After the withdrawal, the Purchase Payment base for the Death Benefit is also reduced by 8% or $9,600. $120,000 x 0.08 = $9,600

Determination Date

The date that the Death Benefit Value is determined is the earlier of: (1) the first anniversary of the date of death; or (2) the date that we have received both proof of death and Requests in Good Order with instructions as to the form of Death Benefit from all Beneficiaries. Thus, in many cases where there are multiple Beneficiaries, the date that the Death Benefit Value is determined will be the date when the last Beneficiary submits the necessary Request in Good Order or the first anniversary of death. Until then, the Contract values remain in the Crediting Strategies and the Indexed Strategy values may fluctuate. This risk is borne by the Beneficiaries.

Proof of Death

Before making payment of a Death Benefit, or any other payment or transfer of ownership rights that depends on the death of a specified person, we will require proof of death. We may delay making any payment until it is received. For this purpose, proof of death is:

• a certified copy of a death certificate showing the cause and manner of death;

• a certified copy of a decree that is made by a court of competent jurisdiction as to the finding of death; or

• other proof that is satisfactory to us.

Form of Death Benefit

The Death Benefit is paid in the form of annual payments for a fixed period of two years.

In place of that, you may elect to have the Death Benefit paid in one lump sum or in any form of Payout Option that is available under your Contract. The available Payout Options are described in the Payout Optionssection below. There is no additional charge associated with this election.

You may make an election by a Request in Good Order. We must receive your request on or before the date of death for which a Death Benefit is payable. If you do not make such an election, the Beneficiary may make that election after the date of death. The Beneficiary’s election must be made by a Request in Good Order that is received by us no later than the date that the Death Benefit Value is applied to a Payout Option and at least 30 days before the date of the first payment to be made.

Additional Rules

Any election is subject to the Death Benefit Distribution Rules described below.

A Payout Option that is contingent on life is based on the life of the Beneficiary or, in some cases, the life of a person to whom the Beneficiary is obligated.

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We will pay the Death Benefit as a lump sum rather than as payments under a Payout Option if: (1) the Death Benefit is less than $2,000; or (2) as of the date that the Death Benefit Value is to be applied to a Payout Option, the Death Benefit Distribution Rules do not allow a two-year payout.

Payee of Death Benefit Payments

Death Benefit payments generally are made to the Beneficiary as the payee.

In place of that, the Beneficiary may elect to have payments made:

• as a tax-free exchange, transfer, or rollover to or for an annuity or tax-qualified account as permitted by federal tax law; or

• in cases where the Beneficiary is an estate, trust, custodial account, corporation, limited liability company, partnership, or other entity, to a person to whom the Beneficiary is obligated to make corresponding payments.

Payments that become due after the death of the Beneficiary are made to:

• the contingent payee designated as part of a Death Benefit Payout Option elected by you; or if none

• then to a contingent payee designated by the Beneficiary; or if none

• the estate of the last payee who received payments.

Such payments are subject to the Death Benefit Distribution Rules described below.

You may designate a contingent payee by a Request in Good Order. A Beneficiary may make or change a payee or contingent payee, except a Beneficiary may not change a designation made as part of a Payout Option election made by you for the Death Benefit. If the Beneficiary designates his or her spouse as a contingent payee and their marriage ends before the Beneficiary’s death, then we will treat the former spouse as having predeceased the Beneficiary except to the extent a court order provides that the former spouse’s rights as a contingent payee are to continue.

Death Benefit Distribution Rules

The Death Benefit Distribution Rules are summarized below.

• For a Tax Qualified Contract. The Death Benefit must be paid in accordance with the tax qualification endorsement.

• For a Nonqualified Contract. The Death Benefit must be paid either: (1) in full within five years of the date of death; or (2) over the life of the Beneficiary or over a period certain not exceeding the Beneficiary’s life expectancy, with payments at least annually, and with the first payment made within one year of the date of death.

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Payout Options

The standard Payout Options are described below.

Payments under each standard Payout Option are made at the end of a payment interval. For example, if the Annuity Payout Initiation Date is October 31, 2028 and you select annual payments, then the first payment will be paid as of October 31, 2029.

Option	Description for Annuity Payout Benefit	Description for Death Benefit
Fixed Period Payout	We will make periodic payments to you, or to the Annuitant, if you direct, for the fixed period of time that you select. • If the payee dies before the end of the fixed period, then we will make periodic payments to the surviving owner(s), or if none, then to the surviving contingent payee(s), or if none, then to the estate of the last payee who received payments. • In all cases, payments will stop at the end of the fixed period. Fixed periods shorter than 10 years are not available.	We will make periodic payments to the Beneficiary for the fixed period of time that you or the Beneficiary selects. • If the Beneficiary dies before the end of the fixed period, then we will make periodic payments to the contingent payee designated as part of any Death Benefit Payout Option that you have elected. If no such contingent payee is surviving, then such payments will be made to a contingent payee designated by the Beneficiary. If there is no contingent payee surviving, then such payments will be made to the estate of the last payee who received payments. • In all cases, payments will stop at the end of the fixed period.
Life Payout	We will make periodic payments to you, or to the Annuitant, if you direct, for as long as the Annuitant lives. Payments will stop on the death of the Annuitant. This means that, even if we have made only one payment when the Annuitant dies, payments will stop. If the Annuitant dies after the Annuity Payout Initiation Date but before the first payment, we will treat the Contract as if payments under the Annuity Payout Benefit had not been requested, no periodic payments will be made at that time, and the benefits of the Contract will continue to be available to the Owner.	We will make periodic payments to the Beneficiary for as long as the Beneficiary lives. Payments will stop on the death of the Beneficiary. This means that, even if we have made only one payment when the Beneficiary dies, payments will stop. If the Beneficiary dies after the Annuity Payout Initiation Date but before the first payment, we will treat the Contract as if payments under the Annuity Payout Benefit had not been requested, no periodic payments will be made at that time, and the benefits of the Contract will continue to be available to the Owner.
Life Payout with Payments for at Least a Fixed Period	We will make periodic payments to you, or to the Annuitant, if you direct, for as long as the Annuitant lives. • If the Annuitant dies after the end of the fixed period you selected, then payments will stop on the death of the Annuitant. • If the Annuitant dies before the end of the fixed period you selected, then we will make periodic payments to the surviving owner(s), or if none, then to the surviving contingent payee(s), or if none, then to the estate of the last payee who received payments. In this case, payments will stop at the end of the fixed period you selected. Fixed periods shorter than 10 years are not available.	We will make periodic payments to the Beneficiary for as long as the Beneficiary lives. • If the Beneficiary dies after the end of the fixed period selected, then payments will stop on the death of the Beneficiary. • If the Beneficiary dies before the end of the fixed period you or the Beneficiary selected, then we will make periodic payments to the contingent payee designated as part of any Death Benefit Payout Option that you have elected. If no such contingent payee is surviving, then such payments will be made to a contingent payee designated by the Beneficiary. If there is no contingent payee surviving, then such payments will be made to the estate of the last payee who received payments. In this case, payments will stop at the end of the fixed period you or the Beneficiary selected.

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Joint and One-Half Survivor Payout
We will make periodic payments to you, or to the primary Annuitant, if you direct, for as long as the primary Annuitant lives. • If the primary Annuitant dies and the secondary Annuitant does not survive the primary Annuitant, then payments will stop on the death of the primary Annuitant. • If the primary Annuitant dies and the secondary Annuitant is surviving, then we will make one-half of the periodic payment to you, or the secondary Annuitant, if you direct, for the rest of the secondary Annuitant’s life. In this case, payments will stop on the death of the secondary Annuitant. This means that, even if we have made only one payment when the primary Annuitant dies, payments will stop unless the secondary Annuitant survives. If the Annuitant dies after the Annuity Payout Initiation Date but before the first payment, we will treat the Contract as if payments under the Annuity Payout Benefit had not been requested, no periodic payments will be made at that time, and the benefits of the Contract will continue to be available to the Owner.
We will make periodic payments to the Beneficiary for as long as the Beneficiary lives. • If the Beneficiary dies and the contingent payee does not survive the Beneficiary, then payments will stop on the death of the Beneficiary. • If the Beneficiary dies and the contingent payee designated as part of the Death Benefit Payout Option election is surviving, then we will make one-half of the periodic payment to the contingent payee for the rest of the contingent payee’s life. In this case, payments will stop on the death of the contingent payee. This means that, even if we have made only one payment when the Beneficiary dies, payments will stop unless the contingent payee survives. If the Beneficiary dies after the Annuity Payout Initiation Date but before the first payment, we will treat the Contract as if payments under the Annuity Payout Benefit had not been requested, no periodic payments will be made at that time, and the benefits of the Contract will continue to be available to the Owner

We will make payments in any other form of Payout Option that is acceptable to us at the time of any election. More than one Payout Option may be elected if the requirements for each Payout Option elected are satisfied. All elected Payout Options must comply with pertinent laws and regulations.

Payments under a Payout Option are calculated and paid as fixed dollar payments. The stream of payments is an obligation of the general account of Great American Life. Fixed dollar payments will remain level for the duration of the payment period. Once payments begin under a Payout Option, the Payout Option may not be changed. Once the Contract value is applied to a Payout Option, the periodic payments cannot be accelerated or converted into a lump sum payment unless we agree.

We will use the 2012 Individual Annuity Reserving Table with projection scale G2 for blended lives (60% female/40% male) with interest at 1% per year, compounded annually, to compute all guaranteed Payout Option factors, values, and benefits under the Contract. For purposes of calculating payments based on the age of a person, we will use his or her age as of his or her last birthday.

Considerations in Selecting a Payout Option

Payments under a Payout Option are affected by various factors, including the length of the payment period, the life expectancy of the person on whose life payments are based, and the frequency of the payment interval (monthly, quarterly, semi-annually or annually).

• Generally, the longer the period over which payments are made or the more frequently the payments are made, the lower the amount of each payment because more payments will be made.

• For Life Payout Options, the longer the life expectancy of the Annuitant or Beneficiary, the lower the amount of each payment because more payments are expected to be paid.

Non-Human Payees under a Payout Option

Except as stated below, the primary payee under a Payout Option must be a human being. All payments during his or her life must be made by check payable to the primary payee or by electronic transfer to a bank account owned by the primary payee.

Exceptions. Below are some exceptions to the general rule that the primary payee must be a human being. We may make other exceptions in our discretion.

• A nonhuman that is the Owner of the Contract may be the primary payee. For example, if the Owner is a trust, that trust may be the primary payee.

• Payments may be made payable to another insurance company or financial institution as a tax-free exchange, transfer, or rollover to or for another annuity or tax-qualified account as allowed by federal tax law.

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Processing Applications and Requests

Processing Applications and Initial Purchase Payments

We will process an application when we have received both the application and the initial Purchase Payment.

• If that happens on a Market Day before the Market Close, we will process the application and apply the Purchase Payment on that Market Day.

• If that happens on a Market Day after the Market Close or on a day that is not a Market Day, then we will process the application and apply the Purchase Payment on the next Market Day.

We cannot process your application if it is not a Request in Good Order or if we have not received your initial Purchase Payment. Likewise, we cannot apply your initial Purchase Payment if we have not received your application.

If you have any questions, you should contact us or your registered representative before submitting your application or sending your initial Purchase Payment.

Processing Additional Purchase Payments

• If we receive an additional Purchase Payment on a Market Day before the Market Close, we will apply it on that Market Day.

• If we receive an additional Purchase Payment on a Market Day after the Market Close or on a day that is not a Market Day, then we will apply it on the next Market Day.

We cannot apply an additional Purchase Payment if we do not have complete instructions from you.

If you have any questions, you should contact us or your registered representative before sending an additional Purchase Payment.

Processing Requests

Requests may be made by mail at P.O. Box 5423, Cincinnati OH 45201-5423.

Request by fax may be made at 513-768-5115.

Requests for reallocations among Strategies may be made by telephone at 1-800-789-6771 between 8:00 AM and 4:00 PM Eastern Time Monday through Friday. We may also permit reallocation requests to be made at our website GAIG annuities. Some selling firms may restrict the ability of their registered representatives to convey reallocation requests by telephone or Internet on your behalf.

To obtain one of our forms (for example, a Strategy Selection form or a Withdrawal Request form) or to obtain more information about how to make a request, call us at 1-800-789-6771 or send us a fax at 513-768-5115. You can also request forms or information by mail at Great American Life Insurance Company, P.O. Box 5423, Cincinnati OH 45201-5423. You may also obtain forms on our website, www.GAIGannuities.com.

We cannot process a request unless it is a Request in Good Order. A request may be rejected or delayed if it is not a Request in Good Order.

• If we receive a Request in Good Order on a Market Day before the Market Close, we will process it using values determined at the Market Close on that Market Day.

• If we receive a Request in Good Order after the Market Close or on a day that is not a Market Day, then we will treat that request as received at the start of the next Market Day.

If you have any questions, you should contact us or your registered representative before submitting the request.

Exception. If a withdrawal under an automatic withdrawal program is scheduled for a date that is not a Market Day, then we will process the withdrawal on the scheduled date using values at the most recent Market Close. For example, if the automatic withdrawal is scheduled for a date that falls on Sunday and there was a Market Close at 4:00 PM on the previous Friday, then we will process the withdrawal on Sunday using values determined at 4:00 PM on that Friday

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Market Days and Market Close

A Market Day is each day that all markets that are used to measure available Indexed Strategies are open for regular trading.

• Saturdays, Sundays, holidays and any other day that the New York Stock Exchange and the New York Stock Exchange Arca are closed are not Market Days.

• The NYSE and the NYSE Arca observe the following holidays: New Year’s Day, Martin Luther King, Jr. Day, President’s Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

A Market Close is the close of the regular or core trading session on the market used to measure a given Indexed Strategy.

NYSE	NYSE Arca
Regular trading hours usually end at 4:00 PM Eastern Time	Core trading session usually ends at 4:00 PM Eastern Time
Trading hours end at 1:00 PM Eastern Time on:	Core trading session ends at 1:00 PM Eastern Time on:
The day before the Fourth of July	The day before the Fourth of July
The Friday after Thanksgiving	The Friday after Thanksgiving
Christmas Eve	Christmas Eve

Regular trading or a core trading session may end at a different time on a Market Day under certain circumstances when and as permitted under applicable rules. Such circumstances generally cannot be predicted in advance.

Specific information about NYSE and NYSE Arca holidays and trading hours in any given calendar year is available at https://www.nyse.com/markets/hours-calendars.

Receipt of Purchase Payments, Applications and Requests

For purposes of processing, we deem Purchase Payments and applications, Requests in Good Order and other instructions (paperwork) mailed to our post office box as received by us at our administrative office when the Purchase Payment or the paperwork reaches the applicable processing department located at 310 E. 4th Street, Cincinnati OH 45202.

Risks and Limitations Related to Requests by Telephone or Internet

We will use reasonable procedures such as requiring certain identifying information, tape recording the telephone instructions, and providing written confirmation of the transaction, in order to confirm that instructions communicated by telephone, fax, Internet or other means are genuine. Any telephone, fax or Internet instructions reasonably believed by us to be genuine will be your responsibility, including losses arising from any errors in the communication of instructions. As a result of this policy, you will bear the risk of loss. We are not responsible for the validity of any request or action.

Telephone and computer systems may not always be available. Any telephone or computer system, whether it is yours, your service provider’s, your agent’s, or ours, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you experience technical difficulties or problems, you should consider making your request by mail.

Suspension of Payments or Transfers

We may be required to suspend or delay payments, withdrawals and reallocations when we cannot obtain an Index Value because:

• the New York Stock Exchange or New York Stock Exchange Arca is closed (other than customary weekend and holiday closings);

• trading on the New York Stock Exchange or New York Stock Exchange Arca is restricted;

• an emergency exists such that it is not reasonably practicable to determine fairly the value of the Index; or

• we are permitted to do so under a regulatory order.

Restrictions on Financial Transactions

Federal laws designed to counter terrorism and prevent money laundering might, in certain circumstances, require us to block an Owner’s ability to make certain transactions. This means that we may be required to refuse to accept any request for withdrawals, Surrenders, Annuity Payout Benefit payments or Death Benefit payments, until instructions are received from the appropriate regulator. We may also be required to provide additional information about you and your Contract to government regulators.

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Right to Cancel (Free Look)

If you change your mind about owning the Contract, you can cancel it within 20 days after you receive it. If you purchased this Contract to replace an existing annuity contract or life insurance policy, you have 30 days after you receive it. This is known as a “free look.” The right to cancel period may be longer in some states.

To cancel your Contract, you must submit your request to cancel to the producer who sold it or send it to us at P.O. Box 5423, Cincinnati, OH 45201-5423. Your request to cancel must be in writing and signed by you.

When you cancel the Contract within this free look period, we will not assess an Early Withdrawal Charge. Unless otherwise required by state law, you will receive the Account Value of your Contract on the day that we receive your cancellation request. The amount you receive may be more or less than your Purchase Payment(s) depending upon the amount of interest earned by your Contract during the free look period and any Vested Gain or Loss that applies as of the day that we receive your cancellation request. This means that you bear the risk of any decline in the Account Value of your Contract during the free look period. We do not refund any charges or deductions assessed during the free look period that relate to a withdrawal taken before you cancel the Contract.

In certain states, we are required to give back your Purchase Payment(s) if you decide to cancel your Contract during the free look period. If we are required by law to refund your Purchase Payment(s), we reserve the right to hold your Purchase Payment(s) in the Purchase Payment Account until the first Strategy Application Date on or after the end of the free look period.

Annual Statement and Confirmations

At least once each calendar year, we will send you a statement that will show: (1) your Account Value; (2) all transactions regarding your Contract during the year; and (3) the interest credited to your Contract and Vested Gains and Losses credited to your Contract.

Such statements will be sent to your last known address on our records. You will have 60 days from the date you receive such statement to inform us of any errors, and otherwise such statement will be deemed final and correct.

We will send out written confirmations of Purchase Payments, Strategy allocations and renewals, withdrawals, and other financial transactions under your Contract. Unless you inform us of any errors within 60 days of receipt of a confirmation, we will consider it to be accurate and complete.

Electronic Delivery

You may elect to receive electronic delivery of the Contract prospectus and other Contract related documents. Contact us at our website at GAIGannuities.com for more information and to enroll.

Abandoned Property Requirements

Every state has unclaimed property laws. These laws generally declare annuity contracts to be abandoned after a period of inactivity of three to five years from: (1) the latest permitted Annuity Payout Initiation Date; or (2) the date of death for which a Death Benefit is due and payable. For example, if the payment of a death benefit has been triggered, but the beneficiary does not come forward to claim the death benefit in a timely manner, the unclaimed property laws will apply.

If a Death Benefit, Annuity Payout Benefit payments or other contract proceeds are unclaimed, we will pay them to the abandoned property division or unclaimed property office of the applicable state. (Escheatment is the formal, legal name for this process.) For example, on an unclaimed Death Benefit, depending on the circumstances, the proceeds are paid: (1) to the state where the beneficiary last resided, as shown on our books and records; (2) to the state where the contract owner last resided, as shown on our books and records; or (3) to Ohio, which is our state of domicile. The state will hold the proceeds without interest until a valid claim is made by the person entitled to the proceeds.

To prevent escheatment of the Death Benefit, Annuity Payout Benefit payments, or other proceeds from your Contract, it is important:

• to update your contact information, such as your address, phone number, and email address, if and as it changes; and

• to update your Beneficiary and other designations, including complete names, complete addresses, phone numbers, and social security numbers, if and as they change.

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Please contact us at P.O. Box 5423, Cincinnati, OH 45201-5423, or call us at 1-800-789-6771, to make such updates.

State unclaimed property laws do not apply to annuity contracts that are held under an employer retirement plan that is subject to the Employee Retirement Income Security Act of 1974 (ERISA).

Owner

The Owner on the Contract Effective Date is set out on your Contract Specifications Page. The Owner possesses all of the ownership rights under a Contract, such as making allocations among the Strategies, electing a Payout Option, and designating a Beneficiary.

If an Owner is a trust, custodial account, corporation, limited liability company, partnership, or other entity, then the age of the eldest Annuitant is treated as the age of the Owner for all purposes of this Contract.

Joint Owners

• For a Nonqualified Contract. Two persons may jointly own the Contract. In this case, the term “Owner” includes the joint Owner and you must exercise all rights of ownership by joint action.

• For a Tax Qualified Contract. No joint owner is permitted.

Change of Owner

• For a Nonqualified Contract. You may change the Owner at any time during your lifetime. A change of Owner cancels all prior Beneficiary designations. It does not cancel a designation of an Annuitant or a Payout Optionelection.

• For a Tax Qualified Contract. You cannot change the Owner except to the limited extent permitted by the tax qualification endorsement.

A change of Owner must be made by a Request in Good Order. A change of Owner may have adverse tax consequences.

Assignment

• For a Nonqualified Contract. You may assign all or any part of your rights under this Contract except your rights to designate or change a Beneficiary or an Annuitant, to change Owners, or to elect a Payout Option.

• For a Tax Qualified Contract. You cannot assign your rights under this Contract except to the limited extent permitted by the tax qualification endorsement.

An assignment must be made by a Request in Good Order. We are not responsible for the validity of any assignment. An assignment may have adverse tax consequences.

The rights of a person holding an assignment, including the right to any payment under this Contract, come before the rights of an Owner, Annuitant, Beneficiary, or other payee. An assignment may be ended only the person holding it or as provided by law.

Successor Owner

Your spouse becomes the successor owner of the Contract and succeeds to all rights of ownership if all of the following requirements are met:

• a Death Benefit is payable on account of your death;

• the sole Beneficiary under the Contract is your spouse or a revocable trust or custodial account created by your spouse;

• either you make that election by a Request in Good Order before your death or your spouse makes that election by a Request in Good Order before the Death Benefit Payment Date; and

• you were not a successor owner of the Contract.

A successor owner election cancels all prior Beneficiary designations. It does not cancel a designation of an Annuitant or a Payout Option election.

In some states, state law extends this successor owner right to a civil union partner or other person who is not your spouse as defined by federal tax law. In that case, distributions after your death must be made as required by the Death Benefit Distributions Rules described in the Death Benefit section above.

Community Property

If you live in a community property state and have a spouse at any time while you own this Contract, the laws of that state may vary your ownership rights.

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Annuitant

The Annuitant is the natural person on whose life Annuity Payout Benefit payments are based. The Annuitant on the Contract Effective Date is set out on your Contract Specifications Page.

• For a Nonqualified Contract. The Annuitant cannot be changed at any time that the Contract is owned by a trust, custodial account, corporation, limited liability company, partnership, or other entity. Otherwise, you may change a designation of Annuitant at any time before the Annuity Payout Initiation Date.

• For a Tax Qualified Contract. The Annuitant must be the natural person covered under the retirement arrangement for whose benefit the Contract is held.

A change of Annuitant must be made by a Request in Good Order. A change of Annuitant does not cancel a designation of a Beneficiary or a Payout Option election.

If an Annuitant dies before the Annuity Payout Initiation Date and no Death Benefit is payable, then in the absence of a new designation, the Annuitant will be:

• the surviving joint Annuitant(s); or if none

• the Owner(s).

Beneficiary

A Beneficiary is a person entitled to receive all or part of a Death Benefit that is to be paid under this Contract on account of a death before the Annuity Payout Initiation Date.

• If a Death Benefit becomes payable on account of your death or the death of a joint Owner, then the surviving Owner is the Beneficiary no matter what other designation you may have made.

• In all other cases, you may designate a person or person who will be the Beneficiaries as provided in the Designation of Beneficiary provision of the Contract.

• If no designated Beneficiary is surviving, then the Beneficiary is your estate.

• If the sole Beneficiary under the Contract is your spouse or a revocable trust or custodial account created by your spouse and all other requirements for successor ownership are met, then your spouse may become the successor owner of the Contract in lieu of receiving the Death Benefit.

A designation of Beneficiary must be made by a Request in Good Order. We must receive the request on or before the date of death for which a Death Benefit is payable.

• You may designate two or more persons jointly as the Beneficiaries. Unless you state otherwise, joint Beneficiaries that are surviving are entitled to equal shares.

• You may designate one or more persons as contingent Beneficiary. Unless you state otherwise, a contingent Beneficiary is entitled to a benefit only if there is no primary Beneficiary who that is surviving.

Survivorship Required

In order to be entitled to receive a Death Benefit, a Beneficiary must survive for at least 30 days after the death for which the Death Benefit is payable.

If you designate your spouse as a Beneficiary and your marriage ends before your death, we will treat your former spouse as having predeceased you unless:

• a court order provides that the former spouse’s rights as a beneficiary are to continue; or

• the former spouse remains or becomes an Owner.

Other Contract Provisions

Amendment of the Contract

We reserve the right to amend the Contract to comply with applicable Federal or state laws or regulations. We will notify you in writing of any such amendments.

Misstatement

We may require proof of the age of the Annuitant, Owner and/or the Beneficiary before making any payments under the Contract that are measured by such person’s life. If the age of the measuring life has been misstated, the amount payable will be the amount that would have been provided at the correct age. If payments based on the correct age would have been higher, we will pay the underpaid amount with interest. If payments would be lower, we may deduct the overpaid amount, with interest, from succeeding payments.

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Involuntary Termination

We may terminate your Contract at any time that the Account Value is less than the minimum required value of $5,000 due to poor market performance or withdrawals from the Contract. For example, we may terminate your Contract if a loss on a Growth Strategy causes your Account Value to fall below $5,000. If we terminate your Contract, we will pay you the Surrender Value determined as of the date that we terminate your Contract.

Loans

Loans are not available under the Contract.

State Variations

This prospectus describes the material features of the Contract. Contracts issued in your state may provide different features and benefits from, and impose different costs than, those described in this prospectus because of state law variations. These differences include, among other things, free look rights, age issuance limitations, transfer rights and limitations, the right to reject a Purchase Payment, and the general availability of certain features. However, please note that the maximum charge is set forth in this prospectus. This prospectus describes the material features of the Contract. If you would like to review a copy of the Contract and any endorsements, contact us at P.O. Box 5423, Cincinnati, OH 45201-5423, visit our website at GAIGannuities.com or call us at 1-800-789-6771.

The following information is a summary of material state variations as of the date of this prospectus.

General

For Contracts Issued in Illinois and New Jersey: References to “spouse” have been changed to “spouse or civil union partner.”

Availability of Strategies

For Contract Issued in Michigan: We will not eliminate the Crediting Strategies set out on your Contract Specifications page at the end of any Term and such Crediting Strategies will be available for renewals and reallocations at the end of each Term.

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Extended Care Waiver Rider. The table below summarizes material state variations related to the rider.

For Contracts Issued in:	Variations in Extended Care Waiver Rider
California	The Waiver of Early Withdrawal Charges for Facility Care or Home Care or Community-Based Services Rider (CA Rider) replaces the Extended Care Waiver Rider. The CA Rider provides a waiver under an expanded set of circumstances. The waiver will apply if, at the time of the withdrawal or surrender, or within the immediately preceding 90 days, the following conditions are met: (1) the insured is confined in a facility or is receiving, as prescribed by a physician, registered nurse or licensed social worker, home care or community-based services; (2) the insured’s confinement in a facility, the insured’s receipt of home care or community-based services, or any combination thereof has continued for a period of at least 90 consecutive days; and (3) the first day of such 90-day period was at least one year after the contract effective date. Facility includes a skilled nursing facility, a convalescent nursing home, or an extended care facility or a residential care facility or a residential care facility for the elderly. Home care or community-based services includes home health care, adult day care, personal care, homemaker services, hospice services and respite care as defined in the rider. Additional conforming changes have been made including revised and new definitions, and inclusion of a description of circumstances under which the waiver does not apply. The termination provision has been modified to reflect that the rider will not terminate if you transfer or assign an interest in the contract to a person or entity other than the insured.
Connecticut	The conditions under which the waiver applies have been modified. The waiver will apply if at the time of a withdrawal or surrender or within the immediately preceding 90 days all of the following conditions are met: (1) an insured is confined in a long-term care facility or hospital; and (2) the confinement has continued for a period of at least 90 consecutive days.
Kansas	The conditions under which the waiver applies have been modified. The first day of confinement must be at least 90 days after the contract effective date, rather than one year after the contract effective date.
Massachusetts and Missouri	This waiver rider in not available in Massachusetts or Missouri.
Montana	The definition of medically necessary has been modified and refers the insured’s physician.
Nebraska	The definition of skilled nursing facility has been modified by adding a licensed practical nurse to the list of persons who may provide nursing services or supervise the provision of nursing services.
New Hampshire	The definition of skilled nursing facility has been modified by changing the phrase “licensed and operated as a skilled nursing facility” to “operated as a skilled nursing facility.”
Pennsylvania	The conditions under which the waiver is available have been modified. The waiver will apply if at the time of a withdrawal or surrender or within the immediately preceding 90 days all of the following conditions are met: (1) an insured is confined in one or more long-term care facilities, hospital, or a combination of such; (2) the confinement is prescribed by a physician and is medically necessary; (3) the first day of the confinement is at least one year after the contract effective date; and (4) the confinement has continued for a period of at least 90 consecutive days, or has continued for a total of at least 90 days if each successive confinement occurs within six months of the previous confinement and is for the same related medical cause. The definition of long-term care facility has been modified. The following facilities have been deleted from the list of facilities excluded from that definition: a facility that primarily treats drug addicts and a facility that is a home for the mentally ill. An exclusion provision has been added to clarify that the waiver will not apply if the insured is confined in a long-term care facility or hospital for the treatment of certain types of drug addiction or mental illnesses. The definition of hospital has been modified by changing the phrase “it maintains, or has access to, medical, diagnostic, and major surgical facilities” to “it maintains, or has access to, medical and diagnostic facilities.”
Vermont	The definition of long-term care facility has been modified. The following facilities have been deleted from the list of excluded facilities: a facility that primarily treats drug addicts, a facility that primarily treats alcoholics, and a facility that is a home for the mentally ill. The definition of physician has been modified by changing the phrase “a person who is licensed in the United States as a medical doctor or a doctor of osteopathy and who is practicing within the scope of his or her license” to “a person who is licensed in the United States who is providing medical care and treatment when such services are provided within the scope of his or her license and provided pursuant to applicable law.”
Washington	The waiver is based on confinement to an extended care facility or hospital rather than a long-term care facility or hospital. Definitions are modified to reflect the new terminology, references to “skilled nursing facility” are changed to “nursing facility” and the related definition is modified. In the definition of nursing facility and hospital, a licensed practical nurse is added to the list of persons who may provide nursing services or supervise the provision of nursing services.

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Terminal Illness Waiver Rider. The table below summarizes material state variations related to the rider.

For Contracts Issued in:	Variations in Terminal Illness Waiver Rider
Illinois, Kansas, Washington	As a result of the terminal illness, your life expectancy must be 24 months from the date of death, rather than 12 months.
Kansas	The diagnosis must be rendered 90 days after the contract effective date, rather than one year after the contract effective date.
New Jersey	The requirement related to the timing of the diagnosis does not apply. But the waiver will not be available until at least one year after the contract effective date.
Massachusetts	This waiver rider in not available in Massachusetts.
Pennsylvania	The diagnosis must be rendered after the contract effective date, rather than one year after the contract effective date. But the waiver will not be available until at least one year after the contract effective date. The waiver is based on a terminal condition as defined in the rider, rather than a terminal illness.
Texas	The diagnosis must be rendered on or after the contract effective date, rather than one year after the contract effective date.

Form of Annuity Payout Benefit

For Contracts Issued in Texas: Payments under a Payout Option are subject to a $50 minimum.

Right to Cancel (Free Look)

State law governs the length of the free look period and the amount of the refund that you will receive. The table below summarizes the state law provisions.

For Contracts Issued in:	Free Look Period and Refund	Replacement Situations: Free Look Period and Refund
Alabama, Colorado, Hawaii, Iowa, Maine, Mississippi, Montana, New Mexico, Ohio, Oregon, Vermont, Virginia, West Virginia	20 days Account Value	30 days Account Value + Fees/Charges
Alaska, Arizona, Connecticut, Illinois, Kansas, Michigan, New Jersey, North Dakota, South Dakota	20 days Account Value + Fees/Charges	30 days Account Value + Fees/Charges
Arkansas, District of Columbia, Pennsylvania	20 days Account Value	30 days Account Value
Delaware, Indiana, Massachusetts, Tennessee	20 days Account Value	30 days Purchase Payments
Georgia, Idaho, Missouri, Nevada, Oklahoma, Utah	20 days Purchase Payments	30 days Purchase Payments
Kentucky, Louisiana, Maryland, Nebraska, New Hampshire, North Carolina, Rhode Island, South Carolina, Texas	20 days Purchase Payments	30 days Account Value + Fees/Charges
California	30 days Account Value + Fees/Charges If owner is age 60 or older, refund amount is Purchase Payments	30 days Account Value + Fees/Charges If owner is age 60 or older, refund amount is Purchase Payments
Florida	21 days Account Value + Fees/Charges	30 days Account Value + Fees/Charges
Minnesota	20 days Account Value + Fees/Charges	30 days Purchase Payments
Washington	20 days Greater of: (1) Purchase Payments or (2) Account Value minus taxes	30 days Purchase Payments
Wisconsin	30 days Account Value	30 days Account Value + Fees/Charges
Wyoming	20 days Account Value	30 days Greater of: (1) Purchase Payments or (2) Account Value + Fees/Charges

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Assignment

For Contracts Issued in Ohio: Subject to the tax qualifications endorsement, if any, you may assign your rights to designate or change a Beneficiary or an Annuitant, to change Owners, or to elect a Payout Option if you make a specific Request in Good Order.

Amendment of the Contract

For Contracts Issued in Florida and Texas: You have the right to reject an endorsement that changes the provisions of this Contract to obtain or retain the intended tax treatment under federal tax law, or to take into account other pertinent laws and governmental regulations and rulings. We will not be responsible for the tax or other consequences of your rejection.

Involuntary Termination

For Contracts Issued in Texas: Our right to terminate this Contract is not tied to the minimum required value. We have the right to terminate this Contract if the Account Value would provide a benefit of less than $20 each month at age 70 under a life payout with payments for at least a fixed period of 10 years.

Index Replacement

We may replace an Index if it is discontinued or we are no longer able to use it, its calculation changes substantially, or we determine that hedging instruments are difficult to acquire or the cost of hedging becomes excessive. We may do so at the end of a Term or during a Term. We will notify you in writing at least 30 days before we replace an Index.

We would attempt to choose a replacement index that is similar to the old Index. To determine if a new index is similar, we will consider factors such as asset class, index composition, strategy or methodology inherent to the index and index liquidity.

If we replace an Index during a Term, we will calculate adjustments for Vested Gains and Losses using the old Index up until the replacement date. After the replacement date, we will calculate adjustments for Vested Gains and Losses using the new index, but with a modified start of Term value for the new index. The modified start of Term value for the new index will reflect the Index Change for the old Index from the start of the Term to the replacement date.

If we replace an Index, the applicable Maximum Gain and Bailout Trigger for the Term, the applicable Maximum Loss, and the Vesting Factors will not change.

Example. This example is intended to show how we would calculate Vested Gain or Loss on any day during a Term if we have replaced an Index during the Term. This example assumes: (1) you allocate $50,000 to an indexed strategy; and (2) the replacement is made on day 90 of the Term. To simplify the example, we assume that you take no withdrawals during the Term.

Index Change on Replacement Date for Old Index
Old Index Value at Term Start	1000
Old Index Value on Replacement Date	1050
Old Index Change on Replacement Date	(1050 - 1000) / 1,000 = 5%

The 5% Index Change on the Replacement Date is then used to calculate the modified start of Term value for the new index.

Modified Start of Term Value for New Index
Old Index Change on Replacement Date	5%
New Index Value on Replacement Date	1785
Modified Start of Term Value for New Index	1785 / (100% + 5%) = 1700

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The modified start of Term value for the new index is then used to calculate the Indexed Strategy value on any date after the replacement date, including the value at the Term end.

Indexed Strategy Value at Term End
Investment Base at Term Start	$50,000
Modified Start of Term Value for New Index	1700
Value of New Index at Term End	1853
Positive Index Change	(1853 - 1,700) / 1700) = 9%
Maximum Gain	Gain of 8%
Positive Index Change Limited by Maximum Gain	8%
Vesting Factor for Positive Index Change at Term End	100%
Vested Gain as a Percentage	8% x 100% = 8%
Vested Gain in Dollars	$50,000 x 8% = $4,000
Strategy Value at Term End	$50,000 + $4,000 = $54,000

Federal Tax Considerations

This section provides a general description of federal income tax considerations relating to the Contracts. The purchase, holding and transfer of a Contract may have federal estate and gift tax consequences in addition to income tax consequences. Estate and gift taxation is not discussed in this prospectus. State taxation will vary depending on the state in which you reside, and is not discussed in this prospectus.

The tax information provided in this prospectus is not intended or written to be used as legal or tax advice. It is written solely to provide general information related to the sale and holding of the Contracts. You should seek advice on legal or tax questions based on your particular circumstances from an attorney or tax advisor who is not affiliated with Great American Life.

Tax Deferral on Annuities

Internal Revenue Code (“IRC”) Section 72 governs taxation of annuities in general. The income earned on a Contract is generally not included in income until it is withdrawn from the Contract. In other words, a Contract is a tax-deferred investment. Tax deferral is not available for a Contract when an Owner is not a natural person unless the Contract is part of a tax-qualified retirement plan or the Owner is a mere agent for a natural person. For a nonqualified deferred compensation plan, this rule means that the employer as Owner of the Contract will generally be taxed currently on any increase in the Surrender Value, although the plan itself may provide a tax deferral to the participating employee.

Under certain circumstances, based on a rule known as the “Investor Control Doctrine,” the IRS has stated that the holder of an annuity contract could be treated as the owner (for tax purposes) of the assets of a separate account that supports the annuity contract. If you were treated as the owner of an interest in the separate account, then you would be taxed on the income, gain, and loss arising out of your interest in the separate account. Although the IRS has not provided definitive guidance on the application of this rule to variable indexed annuity contracts, we do not believe that this rule applies to the Contract because you have no specific, fractional, or unitized interest in the separate account assets, we are not obligated to invest the separate account in any particular assets, the investment return and market value of the separate account assets is not allocated in an identical manner to any Contract, the Contract values are determined based on Vested Gains and Losses regardless of the performance of the separate account assets, and the derivatives that we may hold in the separate account are not publicly traded.

Tax-Qualified Retirement Plans

Annuities may also qualify for tax-deferred treatment, or serve as a funding vehicle, under tax-qualified retirement plans that are governed by other IRC provisions. These provisions include IRC Section 401 (pension, profit sharing, and 401(k) plans), IRC Section 403(b) (tax-sheltered annuities), IRC Sections 408 and 408A (individual retirement annuities), and IRC

Section 457(b) (governmental deferred compensation plans). Tax-deferral is generally also available under these tax-qualified retirement plans through the use of a trust or custodial account without the use of an annuity.

The tax law rules governing tax-qualified retirement plans and the treatment of amounts held and distributed under such plans are complex. If the Contract is to be used in connection with a tax-qualified retirement plan, including an individual retirement annuity (“IRA”) under a Simplified Employee Pension (SEP) Plan, you should seek competent legal and tax advice regarding the suitability of the Contract for your particular situation.

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Contributions to a tax-qualified Contract are typically made with pre-tax dollars, while contributions to other Contracts are typically made from after-tax dollars, though there are exceptions in either case. Tax-qualified Contracts may also be subject to restrictions on withdrawals that do not apply to other Contracts. These restrictions may be imposed to meet the requirements of the IRC or of an employer plan.

Following is a brief description of the types of tax-qualified retirement plans for which the Contracts are available.

Individual Retirement Annuities. IRC Sections 219 and 408 permit certain individuals or their employers to contribute to an individual retirement arrangement known as an “Individual Retirement Annuity” or “IRA”. Under applicable limitations, an individual may claim a tax deduction for certain contributions to an IRA. Contributions made to an IRA for an employee under a Simplified Employee Pension (SEP) Plan or Savings Incentive Match Plan for Employees (SIMPLE) established by an employer are not includable in the gross income of the employee until distributed from the IRA. Distributions from an IRA are taxable to the extent that they represent contributions for which a tax deduction was claimed, contributions made under a SEP plan or SIMPLE, or income earned within the IRA.

Roth IRAs. IRC Section 408A permits certain individuals to contribute to a Roth IRA. Contributions to a Roth IRA are not tax deductible. Tax-free distributions of contributions may be made at any time. Distributions of earnings are tax-free following the five-year period beginning with the first year for which a Roth IRA contribution was made if the Owner has attained age 59 1/2 become disabled, or died, or for qualified first-time homebuyer expenses.

Tax-Sheltered Annuities. IRC Section 403(b) of permits public schools and charitable, religious, educational, and scientific organizations described in IRC Section 501(c)(3) to establish “tax-sheltered annuity” or “TSA” plans for their employees. TSA contributions and Contract earnings are generally not included in the gross income of the employee until distributed from the TSA. Amounts attributable to contributions made under a salary reduction agreement cannot be distributed until the employee attains age 59 1/2, severs employment, becomes disabled, incurs a hardship, is eligible for a qualified reservist distribution, or dies. The IRC and the plan may impose additional restrictions on distributions.

Pension, Profit-Sharing, and 401(k) Plans. IRC Section 401 permits employers to establish various types of retirement plans for employees, and permits self-employed individuals to establish such plans for themselves and their employees. These plans may use annuity contracts to fund plan benefits. Generally, contributions are deductible to the employer in the year made, and contributions and earnings are generally not included in the gross income of the employee until distributed from the plan. The IRC and the plan may impose restrictions on distributions. Purchasers of a Contract for use with such plans should seek competent advice regarding the suitability of the Contract under the particular plan.

Governmental Eligible Deferred Compensation Plans. State and local government employers may purchase annuity contracts to fund eligible deferred compensation plans for their employees, as described in IRC Section 457(b). Contributions and earnings are generally not included in the gross income of the employee until the employee receives distributions from the plan. Amounts cannot be distributed until the employee attains age 70 1/2, severs employment, becomes disabled, incurs an unforeseeable emergency, or dies. The plan may impose additional restrictions on distributions.

Roth TSAs, Roth 401(k)s, and Roth 457(b)s. IRC Section 402A permits TSA plans, 401(k) plans, and governmental 457(b) plans to allow participating employees to designate some part or all of their future elective contributions as Roth contributions. Roth contributions to a TSA plan, 401(k) plan, or governmental 457(b) plan are included in the employee’s taxable income as earned. Amounts attributable to Roth TSA, Roth 401(k), or Roth 457(b) contributions must be held in a separate account from amounts attributable to traditional pre-tax TSA, 401(k), or 457(b) contributions. Distributions from a Roth TSA, Roth 401(k), or Roth 457(b) account are considered to come proportionally from contributions and earnings. Distributions attributable to Roth account contributions are tax-free. Distributions attributable to Roth account earnings are tax-free following the five-year period beginning with the first year for which Roth contributions are made to the plan if the employee has attained age 59 1/2, become disabled, or died. A Roth TSA, Roth 401(k), or Roth 457(b) account is subject to the same distribution restrictions that apply to amounts attributable to traditional pre-tax TSA, 401(k), or 457(b) contributions made under a salary reduction agreement. The plan may impose additional restrictions on distributions.

Nonqualified Deferred Compensation Plans

Employers may invest in annuity contracts in connection with unfunded deferred compensation plans for their employees. Such plans may include eligible deferred compensation plans of non-governmental tax-exempt employers, as described in IRC Section 457(b); deferred compensation plans of both governmental and nongovernmental tax-exempt employers that are taxed under IRC Section 457(f) and subject to Section 409A; and nonqualified deferred compensation plans of for-profit employers subject to Section 409A. In most cases, these plans are designed so that amounts credited under the plan will not be includable in the employees’ gross income until paid under the plan. In these situations, the annuity contracts are not plan assets and are

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subject to the claims of the employer’s general creditors. Whether or not made from the Contract, benefits payments are subject to restrictions imposed by the IRC and the plan.

Summary of Income Tax Rules

The following chart summarizes the basic income tax rules governing tax-qualified retirement plans, nonqualified deferred compensation plans, and other Contracts.

	Tax-Qualified Contracts and Plans	Nonqualified Deferred Compensation Plans	Other Annuity Contracts
Plan Types	•       IRC §408 (IRA, SEP, SIMPLE IRA) •       IRC §408A (Roth IRA) •       IRC §403(b) (Tax-Sheltered Annuity) •       IRC §401 (Pension, Profit–Sharing, 401(k)) •       Governmental IRC §457(b) •       IRC §402A (Roth TSA, Roth 401(k), or Roth 457(b)	•       IRC §409A •       Nongovernmental IRC §457(b) •       IRC §457(f)	•       IRC §72 only
Who May Purchase a Contract	Eligible employee, employer, or employer plan.	Employer on behalf of eligible employee. Employer generally loses tax-deferred status of Contract itself.	Anyone. Non-natural person will generally lose tax-deferred status.
Distribution Restrictions	Distributions from Contract or plan may be restricted to meet IRC and/or plan requirements.		None.
Taxation of Withdrawals, Surrenders, and Lump Sum Death Benefit	Generally, 100% of distributions must be included in taxable income. However, the portion that represents an after-tax contributions or other “investment in the contract” is not taxable. Distributions from Roth IRA are deemed to come first from after- tax contributions. Distributions from other Contracts are generally deemed to come from investment in the contract on a pro-rata basis. Distributions from §408A Roth IRA or §402A Roth TSA, Roth 401(k), or Roth 457(b) are completely tax free if certain requirements are met.		Generally, distributions must be included in taxable income until all earnings are paid out. Thereafter, distributions are tax-free return of the “investment in the contract”. However, distributions are tax-free until any contributions made before August 14, 1982 are returned.
Taxation of Payout Option Payments (Annuity Payout Benefit or Death Benefit)	A percentage of each payment is tax free equal to the ratio of after-tax “investment in the contract” (if any) to the total expected payments, and the balance is included in taxable income. Once the after-tax “investment in the contract” has been recovered, the full amount of each benefit payment is included in taxable income. Distributions from a Roth IRA, Roth TSA, Roth 401(k), or Roth 457(b) are completely tax free if certain requirements are met.
Possible Penalty Taxes for Distributions Before Age 59 1/2	Taxable portion of payments made before age 59 1/2 may be subject to 10% penalty tax (or 25% for a SIMPLE IRA during the first two years of participation). Penalty taxes do not apply to payments after the participant’s death, or to §457 plans. Other exceptions may apply.	No penalty taxes.	Taxable portion of payments made before age 59 1/2 may be subject to a 10% penalty tax. Penalty taxes do not apply to payments after the Owner’s death. Other exceptions may apply.

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	Tax-Qualified Contracts and Plans	Nonqualified Deferred Compensation Plans	Other Annuity Contracts
Assignment/ Transfer of Contract	Assignment and transfer of Ownership generally not permitted.		Generally, deferred earnings taxable to transferor upon transfer or assignment. Gift tax consequences are not discussed herein.
Federal Income Tax Withholding	Eligible rollover distributions from §401, §403(b), and governmental §457(b) plans are subject to 20% mandatory withholding on taxable portion unless direct rollover. For other payments, Payee may generally elect to have taxes withheld or not.	Generally subject to wage withholding.	Generally, Payee may elect to have taxes withheld or not.

Rollovers, Transfers, and Exchanges

Amounts from a tax-qualified Contract may be rolled over, transferred, or exchanged into another tax-qualified account or retirement plan as permitted by the IRC and plan(s). Amounts may be rolled over, transferred, or exchanged into a tax-qualified Contract from another tax-qualified account or retirement plan as permitted by the IRC and plan(s). In most cases, such a rollover, transfer, or exchange is not taxable, unless the rollover of pre-tax amounts is made into a Roth IRA, a Roth TSA, Roth 401(k), or Roth 457(b). Rollovers, transfers, and exchanges are not subject to normal contribution limits. The IRC or plan may require that rollovers be held in a separate Contract from other plan funds.

Amounts from a non-tax-qualified Contract may be exchanged for another non-tax-qualified annuity contract on a tax-free basis as permitted by the IRC. Amounts may be exchanged into a non-tax-qualified Contract from a life insurance policy, an endowment contract, or another non-tax-qualified annuity contract on a tax-free basis as permitted by the IRC.

Required Distributions

The Contracts are subject to the required distribution rules of federal tax law. These rules vary based on the tax qualification of the Contract or the plan under which it is issued.

For a tax-qualified Contract other than a Roth IRA, required minimum distributions must generally begin by April 1 following attainment of age 70 1/2. However, for a 403(b) Tax-Sheltered Annuity Plan, a 401 Pension, Profit-Sharing, or 401(k) Plan, or a 457(b) Governmental Deferred Compensation Plan, a participant who is not a 5% owner of the employer may delay required minimum distributions until April 1 following the year in which the participant retires from that employer. The required minimum distributions during life are calculated based on standard life expectancy tables adopted under federal tax law.

For a Roth IRA or for a Contract that is not tax-qualified, there are no required distributions during life.

All Contracts are generally subject to required distributions after death. Generally, if payments from a non-tax-qualified Contract have begun under a payout option during life or if the required beginning date for distributions from a tax-qualified Contract had been reached, then after death any remaining payments must be made at least as rapidly as those made or required before death. If payments from a non-tax-qualified Contract have not begun, or if the required beginning date for distributions from a tax-qualified Contract has not been reached, then the death benefit must be paid out in full within five years after death, or must be paid out in substantially equal payments beginning within one year of death over a period not exceeding the life expectancy of the designated beneficiary.

For a traditional IRA, a Roth IRA, or a Contract that is not tax-qualified, a beneficiary who is a surviving spouse may elect out of these requirements, and apply the required distribution rules as if the Contract were his or her own. For this purpose, federal tax law recognizes as married any two people whose marriage is valid in the state in which it was celebrated. A civil union or domestic partnership is not considered a marriage.

Premium and Other Taxes

We reserve the right to deduct from the Purchase Payment or Account Value any taxes relating to the Contract paid by us to any government entity (including, but not limited to, premium taxes, additional taxes, and maintenance taxes on insurers, Federal,

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state and local withholding of income, estate, inheritance, or other taxes required by law from annuity purchase payments, and any new or increased taxes on insurers or annuity purchase payments that may be enacted into law).

Currently some state governments impose premium taxes, additional taxes, and maintenance taxes on insurers based on annuity purchase payments received or applied to an annuity payout benefit. These taxes currently range from zero to 3.5% depending upon the jurisdiction and the tax qualification of the Contract. A federal premium tax has been proposed but not enacted. We may deduct any such premium or other taxes from the Purchase Payments or the Account Value at the time that the tax is imposed. We may also deduct any such tax not previously deducted from the Annuity Payout Value or Death Benefit Value.

We reserve the right to deduct from the Contract for any income taxes that we incur because of the Contract. At the present time, however, we are not incurring any such income tax or making any such deductions.

Distribution of the Contracts

Great American Advisors, Inc. (“GAA”) is the principal underwriter and distributor of the securities offered through this prospectus. GALIC and GAA are affiliated because both companies are subsidiaries of Great American Financial Resources, Inc. (“GAFRI”). GAA also acts as the principal underwriter and distributor of the variable annuity contracts that are issued by one of our subsidiaries.

GAA’s principal executive offices are located at 301 E Fourth Street, Cincinnati, Ohio 45202. GAA is registered as a broker- dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as well as the securities regulators in the states in which it operates and registration is required. GAA is a member of the Financial Industry Regulatory Authority (“FINRA”).

Contracts are sold by licensed insurance agents (the “Selling Agents”) in those states where the Contract may be lawfully sold. Such Selling Agents will be appointed agents of GALIC and will be registered representatives of unaffiliated broker-dealer firms (the “Selling Broker-Dealers”) that have entered into selling agreements with us and GAA. Selling Broker-Dealers will be registered under the Securities Exchange Act of 1934 and will be members of FINRA.

FINRA provides background information about broker-dealers and their registered representatives through FINRA BrokerCheck. You may contact the FINRA BrokerCheck Hotline at 1-800-289-9999, or log on to www.finra.org to learn more about GAA, your Selling Agent, and his or her Selling Broker Dealer.

GAA receives no compensation for acting as underwriter of the Contracts; however, GAFRI pays for some of GAA’s operating and other expenses, including overhead and legal and accounting fees. GALIC may reimburse GAA for certain sales expenses, such as marketing materials and advertising expenses, and other expenses of distributing the Contracts.

GALIC or GAA pay the Selling Broker-Dealers compensation for the promotion and sale of the Contract. The Selling Agents who solicit sales of the Contract typically receive a portion of the compensation paid to the Selling Broker-Dealers in the form of commissions or other compensation, depending on the agreement between the Selling Broker-Dealer and the Selling Agent.

The amount and timing of commissions paid to Selling Broker-Dealers may vary depending on the selling agreement but is not expected to be more than 6% of each Purchase Payment. Some Selling Broker-Dealers may elect to receive a lower commission when a Purchase Payment is made, along with annual trail commissions up to 1.5% of Account Value for so long as a contract remains in effect or as agreed in the selling agreement. GALIC may pay or allow other promotional incentives or payments in the form of cash or other compensation to the extent permitted by FINRA rules and other applicable laws and regulations.

GALIC also may pay compensation to wholesaling broker-dealers or other firms or intermediaries in return for wholesaling services such as providing marketing and sales support, product training, and administrative services to the Selling Agents of the Selling Broker-Dealers. These allowances may be based on a percentage of a Purchase Payment.

In addition to the compensation described above, GALIC may make additional cash payments, in certain circumstances referred to as “override” compensations, or reimbursements to Selling Broker-Dealers in recognition of their marketing and distribution, transaction processing and/or administrative services support. These payments are not offered to all Selling Broker-Dealers, and the terms of any particular agreement governing the payments may vary among Selling Broker-Dealers depending on, among other things, the level and type of marketing and distribution support provided. Marketing and distribution support services may include, among other services, placement of GALIC’s products on the Selling Broker-Dealers’ preferred or recommended list, increased access to the Selling Broker-Dealers’ registered representatives for purposes

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of promoting sales of GALIC products, assistance in training and education of the Selling Agents, and opportunities for GALIC and GAA to participate in sales conferences and educational seminars. The payments or reimbursements may be calculated as a percentage of the particular Selling Broker-Dealer’s actual or expected aggregate sales of our indexed annuity contracts (including the Contract) and/or may be a fixed dollar amount. Broker-dealers receiving these additional payments may pass on some or all of the payments to the Selling Agents.

You should ask your Selling Agent for further information about the commissions or other compensation that he or she, or the Selling Broker-Dealer for which he or she works, may receive in connection with your purchase of a Contract.

There is no front-end sales load deducted from the Purchase Payment(s) to pay sales commissions. Commissions and other incentives or payments described above are not charged directly to you. We intend to recoup at least a portion of the sales commissions and other sales expenses through fees and charges deducted under the Contract.

Legal Opinion on Contracts

Legal matters in connection with federal laws and regulations affecting the issue and sale of the Contracts described in this prospectus and the organization of Great American Life, its authority to issue such Contracts under Ohio law, and the validity of the forms of the Contracts under Ohio law have been passed on by John P. Gruber, General Counsel of Great American Life. As a participant in various stock and employee benefit plans, Mr. Gruber owns shares of, and options to purchase, common stock of American Financial Group, Inc., the parent company of Great American Life.

Experts

The consolidated financial statements and schedule of Great American Life Insurance Company at December 31, 2016, and 2015, and for each of the three years in the period ended December 31, 2016, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

Securities and Exchange Commission Position on Indemnification

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling Great American Life pursuant to its articles of incorporation or its code of regulations or pursuant to any insurance coverage or otherwise, Great American Life has been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.

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GREAT AMERICAN LIFE INFORMATION

Overview

Great American Life is a stock insurance company incorporated in 1961. We are domiciled in the state of Ohio and have been continuously engaged in the insurance business since that time. We are licensed to conduct life insurance business in all states of the United States except New York, as well as the District of Columbia, Guam and the U.S. Virgin Islands. Our home office is located at 301 East Fourth Street, Cincinnati, Ohio 45202.

We are a wholly-owned subsidiary of American Financial Group, Inc., (“AFG”), a publicly traded company. American Financial Group, Inc. is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of traditional fixed and fixed-indexed annuities.

Here is a chart that shows the relationships among AFG, Great American Life, and other AFG subsidiaries that are mentioned in this part of this prospectus. Each subsidiary in the chart is wholly-owned by its immediate parent.

No company other than Great American Life has any legal responsibility to pay amounts owed under the Contract. You should look to the financial strength of Great American Life for its claims-paying ability.

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Our General Account

Our general account (the “General Account”) holds all our assets other than assets in our insulated separate accounts. We own our General Account assets, and, subject to applicable law, have sole investment discretion over them. The assets are subject to our general business operation liabilities and claims of our creditors and may lose value. Our General Account assets fund the guarantees provided in the Contracts.

We must invest our assets according to applicable state laws regarding the nature, quality and diversification of investments that may be made by life insurance companies. In general, these laws permit investments, within specified limits and subject to certain qualifications, in Federal, state and municipal obligations, corporate bonds, preferred and common stocks, real estate mortgages, real estate and certain other investments.

We place a majority of the Purchase Payments made under the Contract in our General Account where we primarily invest the assets in a variety of fixed income securities.

We place a portion of the Purchase Payments made under the Contract in a non-unitized separate account (the “Separate Account”) that is not registered with the Securities and Exchange Commission. We established and maintain the Separate Account pursuant to the laws of our domiciliary state for the purpose of supporting our obligation to pay adjustments for vested Gains and Losses associated with the Indexed Strategies. The assets of the Separate Account are held in our name on behalf of the Separate Account and legally belong to us. The assets in the Separate Account are not chargeable with liabilities arising out of any other business that we conduct. We may invest these assets in hedging instruments, including derivative contracts as well as other assets permitted under state law. To support our obligations to pay adjustments for Vested Gains and Losses associated with the Indexed Strategies, we may move money between the Separate Account and our General Account.

We are not obligated to invest the assets of the Separate Account according to any particular plan except as we may be required to by state insurance laws. Regardless of your Strategy allocations, we do not intend to invest the assets of the Separate Account in SPDR Gold Shares or iShares U.S. Real Estate ETF.

Contract owners do not have any interest in or claim on the assets in the Separate Account. Nor do Contract owners participate in any way in the performance of assets held in the Separate Account.

Reliance on Rule 12h-7

Great American Life relies on the exemption provided by Rule 12h-7 under the Securities Exchange Act of the 1934 Act from the requirement to file reports pursuant to Section 15(d) of that Act.

Legal Proceedings

Great American Life and its subsidiaries are involved in litigation from time to time, generally arising in the ordinary course of business. This litigation may include, but is not limited to, general commercial disputes, lawsuits brought by contract owners and policyholders, employment matters, reinsurance collection matters and actions challenging certain business practices of insurance subsidiaries. Also, from time to time, state and federal regulators or other officials conduct formal and informal examinations or undertake other actions dealing with various aspects of the financial services and insurance industries.

It is not possible to predict with certainty the ultimate outcome of any pending legal proceeding or regulatory action. However, Great American Life does not believe any such action or proceeding will have a material adverse effect upon its ability to meet its obligations under the Contracts.

Code of Ethics

AFG has adopted a Code of Ethics applicable to all employees of AFG and its subsidiaries, including Great American Life. The Code is available on AFG’s website at www.AFGinc.com, under “Company.” If you would like a paper copy of the Code, contact us at P.O. Box 5423, Cincinnati OH 45201-5423 or call us at 1-800-789-6771. AFG intends to satisfy any disclosure requirements regarding any amendments to, or waivers from, provisions of the Code by posting such information on its website as promptly as practicable, as may be required by applicable SEC and New York Stock Exchange rules.

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Information on GALIC’s Business and Property

NOTE: In this section of this prospectus, GALIC means Great American Life Insurance Company and its subsidiaries.

ANNUITY SEGMENT

General

GALIC sells traditional fixed and fixed-indexed annuities in the retail, financial institutions and education markets through independent producers and through direct relationships with certain financial institutions. See Note B — “Segments of Operations” to the financial statements for information on GALIC’s assets, revenues and earnings before income taxes by segment. The annuity operations employed approximately 600 people at December 31, 2016. These operations are conducted primarily through the subsidiaries listed in the following table, which includes 2016 statutory annuity premiums (in millions), annuity policies in force and independent ratings.

			Annuity
	Annuity		Policies	Ratings
Company	Premiums		In Force	AM Best	S&P
Great American Life Insurance Company	$	4,242	384,000	A	A+
Annuity Investors Life Insurance Company	193		117,500	A	A+

GALIC believes that the ratings assigned by independent insurance rating agencies are an important competitive factor because agents, potential policyholders, financial institutions, and school districts often use a company’s rating as an initial screening device in considering annuity products. GALIC believes that a rating in the “A” category by at least one rating agency is necessary to successfully compete in its primary annuity markets.

Statutory premiums of GALIC’s annuity operations for the last three years were as follows (in millions):

	Premiums
	2016		2015		2014
Financial institutions single premium annuities — indexed	$	1,950	$	1,741	$	1,489
Financial institutions single premium annuities — fixed	468		229		332
Retail single premium annuities — indexed	1,714		1,864		1,533
Retail single premium annuities — fixed	82		69		97
Education market — fixed and indexed annuities	184		194		194
Total fixed annuity premiums	4,398		4,097		3,645
Variable annuities	37		42		47
Total annuity premiums	$	4,435	$	4,139	$	3,692

Annuities are long-term retirement saving instruments that benefit from income accruing on a tax-deferred basis. The issuer of the annuity collects premiums (purchase payments), credits interest or earnings on the policy and pays out a benefit upon death, surrender or annuitization. Single premium annuities are generally issued in exchange for a one-time lump-sum premium payment. Certain annuities, primarily in the education market, have premium payments that are flexible in both amount and timing as determined by the policyholder and are generally made through payroll deductions.

Annuity contracts are generally classified as either fixed rate (including fixed-indexed) or variable. With a traditional fixed rate annuity, GALIC seeks to maintain a desired spread between the yield on its investment portfolio and the rate it credits to policyholders. GALIC accomplishes this by: (i) offering crediting rates that it has the option to change after any initial guarantee period (subject to minimum interest rate and other contractual guarantees); (ii) designing annuity products that encourage persistency; and (iii) maintaining an appropriate matching of assets and liabilities.

A fixed-indexed annuity provides policyholders with the opportunity to receive a crediting rate tied, in part, to the performance of an existing market index (generally the S&P 500) or other external rate, price, or unit value (an “index”) while protecting against the related downside risk through a guarantee of principal (excluding surrender charges, market value adjustments, and certain benefit charges). GALIC purchases call options designed to substantially offset the effect of the index participation in the liabilities associated with fixed-indexed annuities.

As an ancillary product in its education market, GALIC offers a limited amount of variable annuities. With a variable annuity, the earnings credited to the policy vary based on the investment results of the underlying investment options chosen by the

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policyholder, generally without any guarantee of principal except in the case of death of the insured. Premiums directed to the underlying investment options maintained in separate accounts are invested in funds managed by various independent investment managers. GALIC earns a fee on amounts deposited into separate accounts. Subject to contractual provisions, policyholders may also choose to direct all or a portion of their premiums to various fixed-rate options, in which case GALIC earns a spread on amounts deposited.

The following table shows the earnings before income taxes for the annuity segment both before and after the impact of fair value accounting for derivatives related to fixed-indexed annuities (“FIAs”) (dollars in millions):

	Year ended December 31,
	2016			2015			2014
Annuity earnings before income taxes — before the impact of derivatives related to FIAs	$	398		$	356		$	352
Impact of derivatives related to FIAs (a)	(27		)	(23		)	(34		)
Annuity segment earnings before income taxes	$	371		$	333		$	318

(a) Fixed-indexed annuities provide policyholders with a crediting rate tied, in part, to the performance of an existing stock market index. GALIC attempts to mitigate the risk in the index-based component of these products through the purchase of call options on the appropriate index. GALIC’s strategy is designed so that the change in the fair value of the call option assets will generally offset the economic change in the liabilities from the index participation. Both the index-based component of the annuities (fair value of $1.76 billion at December 31, 2016) and the related call options (fair value of $492 million at December 31, 2016) are considered derivatives that must be adjusted for changes in fair value through earnings each period. Fluctuations in interest rates and the stock market, among other factors, can cause volatility in the periodic measurement of fair value of the embedded derivative that management believes can be inconsistent with the long-term economics of these products.

Marketing

GALIC sells its single premium annuities, excluding financial institution production (discussed below), primarily through a retail network of approximately 55 national marketing organizations (“NMOs”) and managing general agents (“MGAs”) who, in turn, direct nearly 1,200 actively producing agents.

GALIC also sells single premium annuities in financial institutions through direct relationships with certain financial institutions and through independent agents and brokers. The table below highlights the percentage of GALIC’s total annuity premiums generated through its top five financial institution relationships (ranked based on 2016 premiums):

	2016		2015
Wells Fargo & Company	14.2	%	11.7	%
The PNC Financial Services Group, Inc.	9.7	%	4.4	%
LPL Financial	4.8	%	3.8	%
Regions Financial Corporation	4.8	%	3.8	%
BB&T Corporation	4.5	%	6.0	%

In the education market, schools may allow employees to save for retirement through contributions made on a before-tax basis. Federal income taxes are not payable on pretax contributions or earnings until amounts are withdrawn. GALIC sells its education market annuities directly through writing agents rather than through NMOs and MGAs.

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GALIC is licensed to sell its fixed annuity products in all states except New York; it is licensed to sell its variable products in all states except New York and Vermont. At December 31, 2016, GALIC had approximately 500,000 annuity policies in force. The states that accounted for 5% or more of GALIC’s annuity premiums in 2016 and the comparable preceding years are shown below:

	2016		2015		2014
California	9.8	%	9.7	%	9.8	%
Florida	8.5	%	9.0	%	9.6	%
Pennsylvania	7.2	%	7.2	%	6.3	%
New Jersey	5.3	%	4.3	%	4.0	%
Ohio	5.2	%	5.7	%	5.8	%

Competition

GALIC’s annuity businesses operate in highly competitive markets. They compete with other insurers and financial institutions based on many factors, including: (i) ratings; (ii) financial strength; (iii) reputation; (iv) service to policyholders and agents; (v) product design (including interest rates credited, bonus features and caps and rates for indexed strategies); (vi) commissions; and (vii) number of school districts in which a company has approval to sell. Since most policies are marketed and distributed through independent agents, the insurance companies must also compete for agents.

No single insurer dominates the markets in which GALIC’s annuity businesses compete. See Risk Factors Related to GALIC’s Business. Competitors include (i) individual insurers and insurance groups, (ii) mutual funds and (iii) other financial institutions. In a broader sense, GALIC’s annuity businesses compete for retirement savings with a variety of financial institutions offering a full range of financial services. In the financial institution annuity market, GALIC’s annuities compete directly against competitors’ annuities, certificates of deposit and other investment alternatives at the point of sale. In addition, over the last few years, several offshore and/or hedge fund companies have made significant acquisitions of annuity businesses, resulting in annuity groups that are larger in size than GALIC’s annuity business.

Sales of annuities, including renewal premiums, are affected by many factors, including: (i) competitive annuity products and rates; (ii) the general level and volatility of interest rates, including the slope of the yield curve; (iii) the favorable tax treatment of annuities; (iv) commissions paid to agents; (v) services offered; (vi) ratings from independent insurance rating agencies; (vii) other alternative investments; (viii) performance and volatility of the equity markets; (ix) media coverage of annuities; (x) regulatory developments regarding suitability and the sales process; and (xi) general economic conditions.

Run-off Life Segment

Although GALIC no longer actively markets new life insurance products, it continues to service and receive renewal premiums on its in-force block of approximately 116,000 policies and $13.49 billion gross ($3.27 billion net of reinsurance) of life insurance in force at December 31, 2016. Renewal premiums, net of reinsurance, were $18 million in 2016 and $20 million in 2015 and 2014. At December 31, 2016, GALIC’s life insurance reserves were $312 million, net of reinsurance recoverables.

Investment Portfolio

General

A summary of GALIC’s fixed maturities and equity securities is shown in Note E to the financial statements. For additional information on GALIC’s investments, see Management’s Discussion and Analysis — “Investments.”

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Fixed Maturity Investments

GALIC’s bond portfolio is invested primarily in taxable bonds. The following table shows GALIC’s available for sale fixed maturity investments by Standard & Poor’s Corporation or comparable rating as of December 31, 2016 (dollars in millions).

	Amortized		Fair Value
	Cost		Amount		%
S&P or comparable rating
AAA, AA, A	$	16,456	$	16,800	60	%
BBB	8,222		8,405		30	%
Total investment grade	24,678		25,205		90	%
BB	565		572		2	%
B	349		348		1	%
CCC, CC, C	587		656		2	%
D	413		452		2	%
Total non-investment grade	1,914		2,028		7	%
Not rated	718		787		3	%
Total	$	27,310	$	28,020	100	%

The National Association of Insurance Commissioners (“NAIC”) has retained third-party investment management firms to assist in the determination of appropriate NAIC designations for mortgage-backed securities (“MBS”) based not only on the probability of loss (which is the primary basis of ratings by the major ratings firms), but also on the severity of loss and statutory carrying value. Approximately 14% of GALIC’s fixed maturity investments are MBS. At December 31, 2016, 97% (based on statutory carrying value of $27.38 billion) of GALIC’s fixed maturity investments had a NAIC designation of 1 or 2 (the highest of the six designations).

Equity Investments

At December 31, 2016, GALIC held common and perpetual preferred stocks classified as available for sale with a fair value of $495 million.

Regulation

GALIC and its insurance company subsidiaries are subject to regulation in the jurisdictions where they do business. In general, the insurance laws of the various states establish regulatory agencies with broad administrative powers governing, among other things, premium rates, solvency standards, licensing of insurers, agents and brokers, trade practices, forms of policies, maintenance of specified reserves and capital for the protection of policyholders, deposits of securities for the benefit of policyholders, investment activities and relationships between insurance subsidiaries and their parents and affiliates. Material transactions between insurance subsidiaries and their parents and affiliates generally must receive prior approval of the applicable insurance regulatory authorities and be disclosed. In addition, while differing from state to state, these regulations typically restrict the maximum amount of dividends that may be paid by an insurer to its shareholders in any twelve-month period without advance regulatory approval. Such limitations are generally based on net earnings or statutory surplus. Under applicable restrictions, the maximum amount of dividends payable in 2017 by GALIC to its parent without seeking regulatory approval is $197 million. The maximum amount of dividends receivable from GALIC’s insurance subsidiaries in 2017 without seeking regulatory approval is $27 million.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), among other things, established a Federal Insurance Office (“FIO”) within the U.S. Treasury. Under this law, regulations will need to be created for the FIO to carry out its mandate to focus on systemic risk oversight. The FIO has gathered information regarding the insurance industry and submitted a report to Congress in December 2013. The report concluded that a hybrid approach to regulation, involving a combination of state and federal government action, could improve the U.S. insurance system by attaining uniformity, efficiency and consistency, particularly with respect to solvency and market conduct regulation. GALIC cannot predict the extent to which the report’s recommendations might result in changes to the current state-based system of insurance industry regulation or ultimately impact GALIC’s operations.

Most states have created insurance guaranty associations that assess solvent insurers to pay claims of insurance companies that become insolvent. Annual guaranty assessments for GALIC has not been material.

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Properties

GALIC leases the majority of its office and storage facilities from AFG.

Risk Factors Related to GALIC’s Business

In addition to the other information set forth in this prospectus, particularly information under “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the following factors could materially affect GALIC’s business, financial condition, cash flows or future results. Any one of these factors could cause GALIC’s actual results to vary materially from recent results or from anticipated future results. The risks described below are not the only risks facing GALIC. Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial also may materially adversely affect GALIC’s business, financial condition and/or operating results.

Adverse developments in the financial markets and deterioration in global economic conditions could have a material adverse effect on GALIC’s results of operations and financial condition.

Worldwide financial markets have, from time to time, experienced significant and unpredictable disruption. For example, during the financial crisis that started approximately nine years ago, the United States and many other economies experienced a prolonged economic downturn, resulting in heightened credit risk, reduced valuation of certain investments and decreased economic activity. Financial markets may again experience significant and prolonged disruption, including disruption from unanticipated events. In the years following the financial crisis, the federal government has taken steps to stabilize financial markets, but such steps may not be effective.

Changes in financial markets including fluctuations in interest rates, credit conditions, equity prices and many other factors that are unpredictable and beyond GALIC’s control can adversely affect the value of investments and the realization of investment income.

A significant majority of the Company’s investment portfolio consists of fixed maturity investments, and changes in global economic conditions, including interest rates, could have a material adverse effect on GALIC’s results of operations and financial condition.

As of December 31, 2016, approximately 91% of GALIC’s investment portfolio holdings consisted of fixed maturity investments that are sensitive to changes in interest rates. A decline in interest rates may reduce the returns earned on new and floating-rate fixed maturity investments, thereby reducing GALIC’s net investment income, while an increase in interest rates may reduce the value of GALIC’s existing fixed maturity investments, which primarily have fixed interest rates. The value of GALIC’s fixed maturity investments is also subject to risk that certain investments may default or become impaired due to deterioration in the financial condition of issuers of those investments. If a decline in the fair value of a specific investment (below its amortized cost) is considered to be other-than-temporary, a provision for impairment would be charged to earnings.

Interest rates have remained at historical lows for an extended period. In addition, central banks in some countries have recently pursued largely unprecedented negative interest rate policies, the consequences of which are uncertain. The continuation of the current low interest rate environment or a deflationary environment with negative interest rates could affect business behavior in ways that are adverse to GALIC and could constrict GALIC’s net investment income.

As of December 31, 2016, mortgage-backed securities constituted approximately 14% of GALIC’s fixed maturity portfolio. In addition to the risks applicable to the entire fixed maturity investment portfolio, changes in interest rates can expose GALIC to prepayment risks on mortgage-backed securities. In periods of declining interest rates, mortgage prepayments generally increase and mortgage-backed securities are paid down more quickly, requiring GALIC to reinvest the proceeds at the then current market rates, which may be lower than on the securities repaid.

Changes in interest rates could adversely affect the profitability of GALIC’s annuity business.

The profitability of GALIC’s annuity segment is largely dependent on the spread between what it earns on its investments and the crediting rate it pays on its annuity contracts plus expenses incurred.

Both rising and declining interest rates can negatively affect the Company’s annuity results. Most of GALIC’s annuity products have guaranteed minimum crediting rates. Although GALIC could reduce the average crediting rate on a substantial portion of

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its traditional fixed and fixed-indexed annuities during periods of low or falling interest rates, GALIC may not be able to fully offset the decline in investment earnings with lower crediting rates.

During periods of rising interest rates, the Company may experience competitive pressure to increase crediting rates to avoid a decline in sales or increased surrenders, thus resulting in lower spreads. In addition, an increase in surrenders could require the sale of investments at a time when the prices of those assets are lower due to the increase in market rates, which may result in realized investment losses.

Intense competition could adversely affect GALIC’s results of operations.

GALIC’s annuity segment competes with individual insurers and insurance groups, mutual funds and other financial institutions. In addition, in recent years, offshore and/or hedge fund companies have made significant acquisitions of annuity businesses. Peer companies and competitors for GALIC’s annuity segment include the following companies and/or their subsidiaries: Allianz Life Insurance Company of North America, American Equity Investment Life Holding Company (Eagle Life Insurance Company), American International Group Inc., Athene Holding Ltd, Global Atlantic Financial Group Ltd. (Forethought Life Insurance Company), Lincoln National Corp., MetLife, Inc., Nationwide Mutual Insurance Company, Pacific Life Insurance Company, Sumitomo Life Insurance Company (Symetra Financial Corporation) and Voya Financial.

Competition is based on numerous factors including reputation, product design, interest crediting rates, performance, scope of distribution, price and perceived financial strength and credit ratings. While generally lower rated, the hedge fund companies are often more aggressive on pricing, which could adversely affect GALIC’s annuity segment’s ability to grow its business, as well as its surrender activity.

A significant percentage of GALIC’s sales of annuity products through financial institutions is concentrated in a small number of institutions.

Annuity premiums generated through financial institutions represented 55% of GALIC’s annuity premiums in 2016 and have been a key driver in the growth of GALIC’s annuity business. In 2016, two large financial institutions accounted for 44% of GALIC’s total sales through financial institutions and 24% of GALIC’s overall annuity sales. In the financial institutions annuity market, GALIC competes directly against competitors’ annuities, certificates of deposit and other investment alternatives at the point of sale. Loss of a substantial portion of this business coupled with a failure to replace these financial institutions if they significantly reduce sales of GALIC annuities could reduce GALIC’s future growth.

GALIC’s premiums could be adversely affected if it is not able to attract and retain independent agents.

GALIC’s reliance on the independent agency market makes it vulnerable to a reduction in the amount of business written by agents. Many of GALIC’s competitors also rely significantly on the independent agency market. Accordingly, GALIC must compete with other insurance carriers for independent agents’ business. Some of its competitors offer a wider variety of products, higher crediting rates or higher commissions. A reduction in the number of independent agencies marketing GALIC’s products, the failure of agencies to successfully market GALIC’s products, changes in the strategy or operations of agencies (including agency consolidation) or the choice of agencies to reduce their writings of GALIC products could adversely affect GALIC’s future growth.

The inability to collect on ceded reinsurance could adversely affect GALIC’s results of operations.

GALIC has reinsured the majority of its run-off life segment and is subject to credit risk with respect to its reinsurers, as GALIC will remain liable to its insureds if any reinsurer is unable to meet its obligations under agreements covering the reinsurance ceded. The collectability of recoverables from reinsurers is subject to uncertainty arising from a number of factors, including a reinsurers’ financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract and changes in market conditions. As of December 31, 2016, recoverables from reinsurers reported on GALIC’s Balance Sheet were $343 million.

GALIC is subject to comprehensive regulation, and its ability to earn profits may be restricted by these regulations.

GALIC is subject to comprehensive regulation by government agencies in the states where its insurance company subsidiaries are domiciled and where these subsidiaries issue policies and handle claims. Most insurance regulations are designed to protect the interests of GALIC’s policyholders and third party claimants as opposed to its investors.

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The Dodd-Frank Act, enacted in June 2010, mandates changes to the regulation of the financial services industry. Implementation of the Dodd-Frank Act is ongoing. The potential impacts of the Act on the U.S. insurance industry are not clear, but may affect GALIC’s operations and governance in ways that could adversely affect GALIC’s financial condition and results of operations.

Changes in tax laws or interpretations of such laws could increase GALIC’s corporate taxes and reduce earnings. However, it remains difficult to predict the timing and effect that future tax law changes could have on GALIC’s earnings.

On April 6, 2016, the U.S. Department of Labor released a final regulation that substantially expands the range of activities that will be considered fiduciary advice under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986. Implementation is scheduled to phase in beginning April 10, 2017. The new regulation deems advisers, including independent agents, who sell fixed-indexed annuities to IRAs, IRA rollovers or 401(k) plans to be fiduciaries and prohibits them from receiving compensation unless they comply with a prohibited transaction exemption requiring advisers to comply with impartial conduct standards. In addition, GALIC may be required to provide enhanced oversight over the sales process. On February 3, 2017, President Trump issued a presidential memorandum directing the Department of Labor to examine the regulation. While the memorandum does not delay the implementation date for the regulation, on February 9, 2017, the Department of Labor filed a notice with the Office of Management and Budget (“OMB”) to delay implementation of the regulation. The OMB is reviewing the notice and, if approved, will send the notice for publication in the Federal Register. Even if delayed or repealed, many financial firms have taken steps to comply with the regulation and may decide to continue to comply. If implemented, compliance with the prohibited transaction exemptions will likely result in increased regulatory burdens, changes to GALIC’s product offerings and compensation to agents and increased litigation risk, which could negatively impact GALIC’s business, results of operations or financial condition. Management cannot currently predict the effect on GALIC’s business if the regulation is not implemented but is partly or substantially followed by some or all its independent agents.

Existing insurance-related laws and regulations may become more restrictive in the future or new restrictive laws may be enacted; it is not possible to predict the potential effects of these laws and regulations. The costs of compliance or the failure to comply with existing or future regulations could impose significant burdens on the Company.

A downgrade or potential downgrade in GALIC’s financial strength ratings by one or more rating agencies could adversely affect its business, financial condition, results of operations and/or cash flows.

GALIC’s financial strength is rated A (Excellent) by A.M. Best, A+ by Standard & Poor’s and A2 by Moody’s. GALIC believes that the ratings assigned by these independent insurance rating agencies are an important competitive factor because agents, potential contract owners, financial institutions and school districts often use a company’s rating as an initial screening device in considering annuity products. GALIC believes that a rating in the “A” category by at least one rating agency is necessary to successfully compete in its primary annuity markets.

GALIC may experience difficulties with technology or data security, which could have an adverse effect on its business or reputation.

GALIC uses computer systems to store, retrieve, evaluate and utilize company and customer data and information. Systems failures or outages could compromise GALIC’s ability to perform business functions in a timely manner, which could harm its ability to conduct business and hurt its relationships with business partners and customers. In the event of a disaster such as a natural catastrophe, an industrial accident, a blackout, a computer virus, a terrorist attack or war, GALIC’s systems may be inaccessible to employees, customers or business partners for an extended period of time. Even if GALIC’s employees are able to report to work, they may be unable to perform their duties for an extended period of time if GALIC’s data or systems are disabled or destroyed.

GALIC’s computer systems are vulnerable to security breaches due to the sophistication of cyber-attacks, viruses, malware, hackers and other external hazards, as well as inadvertent errors, equipment and system failures, and employee misconduct. In addition, over time, and particularly recently, the sophistication of these threats continues to increase. GALIC’s administrative and technical controls as well as other preventative actions used to reduce the risk of cyber incidents and protect GALIC’s information may be insufficient to detect or prevent unauthorized access, other physical and electronic break-ins, cyber-attacks or other security breaches to GALIC’s computer systems or those of third parties with whom GALIC does business.

GALIC has increasingly outsourced certain technology and business process functions to third parties and may continue to do so in the future. Outsourcing of certain technology and business process functions to third parties may expose GALIC to increased risk related to data security or service disruptions. If GALIC does not effectively develop, implement and monitor

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these relationships, third party providers do not perform as anticipated, technological or other problems are incurred with a transition, or outsourcing relationships relevant to GALIC’s business process functions are terminated, GALIC may not realize expected productivity improvements or cost efficiencies and may experience operational difficulties, increased costs and a loss of business.

The increased risks identified above could expose GALIC to data loss, disruption of service, monetary and reputational damages, competitive disadvantage and significant increases in compliance costs and costs to improve the security and resiliency of GALIC’s computer systems. The compromise of personal, confidential or proprietary information could also subject GALIC to legal liability or regulatory action under evolving cyber-security, data protection and privacy laws and regulations enacted by the U.S. federal and state governments, or by various regulatory organizations or exchanges. As a result, GALIC’s ability to conduct business and its results of operations might be materially and adversely affected.

Any failure to protect the confidentiality of customer information could adversely affect GALIC’s reputation and have a material adverse effect on GALIC’s business, financial condition and results of operations.

GALIC receives and is required to protect confidential information from customers, vendors and other third parties that may include financial information. In addition, GALIC and certain of its third-party vendors receive and store personal information in connection with GALIC’s human resources operations and other aspects of GALIC’s business. GALIC is subject to numerous federal and state laws regarding the privacy and security of personal information, which laws vary significantly from jurisdiction to jurisdiction. If any disruption or security breach results in a loss or damage to GALIC’s data, or inappropriate disclosure of GALIC’s confidential information or that of others, it could damage GALIC’s reputation, affect its relationships with customers and clients, lead to claims against GALIC, result in regulatory action and harm GALIC’s business. In addition, GALIC may be required to incur significant costs to mitigate the damage caused by any security breach or to protect against future damage.

Variations from the actuarial assumptions used to establish certain assets and liabilities in GALIC’s annuity business could adversely affect GALIC’s results of operations.

The earnings on GALIC’s annuity products depend significantly upon the extent to which actual experience is consistent with the assumptions used in setting reserves and establishing and amortizing deferred policy acquisition costs (“DPAC”). These assumptions relate to investment yields (and spreads over fixed annuity crediting rates), benefit utilization rates, equity market performance, mortality, surrenders, annuitizations and other withdrawals. Developing such assumptions is complex and involves information obtained from company-specific and industry-wide data, as well as general economic information. These assumptions, and therefore GALIC’s results of operations, could be negatively impacted by changes in any of the factors listed above.

Changes to existing accounting standards could adversely impact GALIC’s reported results of operations.

For SEC reporting purposes, GALIC prepares its financial statements in accordance with GAAP, as promulgated by the Financial Accounting Standards Board, subject to the accounting-related rules and interpretations of the SEC. Changes in accounting standards, particularly those that specifically apply to insurance company operations, may impact GALIC’s reported financial results and could cause increased volatility in reported earnings, resulting in other adverse impacts on GALIC’s ratings and cost of capital, and decrease the understandability of GALIC’s financial results as well as the comparability of GALIC’s reported results with other insurers.

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Directors and Executive Officers

The directors and executive officers of Great American Life are as follows. Age and position(s) are provided as of April 30, 2016.

Name	Age	Position(s) with Great American Life	Served in Position(s) Since
S. Craig Lindner	62	Director President and Chief Executive Officer	December 1992 December 2010
Jeffrey G. Hester	51	Director	December 2010
Christopher P. Miliano	58	Director Executive Vice President, Chief Financial Officer and Treasurer	May 2002 May 2002
Mark F. Muething	57	Director Executive Vice President and Chief Operating Officer	October 1993 April 2012
Michael J. Prager	57	Director	May 2002

S. Craig Lindner

Mr. Lindner has served as a director of GALIC since December 1992 and as GALIC’s President and Chief Executive Office since December 2010. Mr. Lindner has been Co-Chief Executive Officer of AFG since January 2005, and since 1996, he has served as Co-President of AFG. For more than ten years, Mr. Lindner has been President of GAFRI and has been principally responsible for AFG’s annuity operations. Until 2011, for over ten years, Mr. Lindner served as President of AMMC and Mr. Lindner continues to be primarily responsible for AFG’s investments. Mr. Lindner’s familiarity with AFG as a whole, as well as his experience and expertise in its core annuity operations and AFG’s investment portfolio, makes his service as a director beneficial to GALIC.

Jeffrey G. Hester

Mr. Hester has served as a director of GALIC since December 2010. He also serves as Controller of GAFRI. Mr. Hester has been with AFG since December 1993. Mr. Hester’s many years of experience with budgeting, procurement, financial reporting and other accounting matters enables him to provide to the Board insights and advice on a broad variety of situations and issues that the Board faces.

Christopher P. Miliano

Mr. Miliano has served as a director of GALIC since May 2002. He has served as Executive Vice President, Chief Financial Officer and Treasurer of GALIC since May 2002. Mr. Miliano has been with AFG since September 1979. Mr. Miliano’s knowledge of complex financial and business issues involving GALIC, as well as his business expertise generally, render his Board service invaluable to GALIC.

Mark F. Muething

Mr. Muething has served as a director of GALIC since October 1993 and as GALIC’s Executive Vice President and Chief Operating Officer since April 2012. Mr. Muething has been with AFG since October 1993. Mr. Muething’s many years of experience with complex legal and business issues involving GALIC, as well as his legal and business expertise generally, render his Board service invaluable to GALIC.

Michael J. Prager

Mr. Prager has served as a director of GALIC since May 2002. He also serves as Executive Vice President, Chief Risk Officer, and Chief Actuary of GAFRI. Mr. Prager has been with AFG since June 2000. The Board values Mr. Prager’s knowledge and experience in the areas of actuarial planning and reporting, financial reporting, product development, and risk management and has determined that his ability to contribute his experience on a constant basis as a member of the Board are invaluable to GALIC.

Great American Life does not have an audit, nominating or compensation committee. None of its directors are independent under the independence standards of the New York Stock Exchange.

Executive Compensation

Compensation Discussion and Analysis

This Compensation Discussion and Analysis section describes the material components of the executive compensation program for Great American Life’s named executive officers as set forth in the Summary Compensation Table.

As discussed elsewhere in this prospectus, Great American Life is an indirect wholly owned subsidiary of AFG. AFG’s common shares are listed on the New York Stock Exchange, and AFG files reports with the U.S. Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, including annual reports on Form 10-K and proxy materials

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on Schedule 14A. Great American Life has not issued securities that are traded publicly (except for the Contracts) and therefore, all references to shares and shareholders in this section refer to those of AFG.

Great American Life’s named executive officers include the following individuals: S. Craig Lindner, John B. Berding, Mark F. Muething, Christopher P. Miliano, and Michael J. Prager.

Two of Great American Life’s named executive officers, S. Craig Lindner, President, and John B. Berding, Chief Investment Officer, are also named executive officers of AFG. Their total compensation is set forth in the Summary Compensation Table included in AFG’s proxy materials and discussed in the Compensation Discussion and Analysis section (the “AFG CD&A”) of AFG’s 2017 proxy statement filed with the SEC on April 7, 2017.

Special Note Regarding Compensation of Mr. Berding

Because Mr. Berding has responsibilities with AFG and other AFG subsidiaries, all dollar amounts for Mr. Berding set forth in the Summary Compensation Table on page 72 of this prospectus, the All Other Compensation Table on page 72 of this prospectus, and the Nonqualified Deferred Compensation Table on page 74 of this prospectus, reflect the allocation of 67% of his compensation to Great American Life. This percentage merely reflects the allocation of compensation expense to Great American Life and is not indicative of the allocation of time and responsibility that Mr. Berding devotes to Great American Life as opposed to AFG or other AFG subsidiaries. Similarly, the amounts for Mr. Berding disclosed in the Grants of Plan-Based Awards Table on page 72 of this prospectus also reflect the 67% allocation.

Overview of Compensation Program

As discussed in the AFG CD&A, the Compensation Committee of AFG’s Board of Directors (the “AFG Compensation Committee”) has responsibility for reviewing and approving the compensation paid to AFG’s Co-CEOs and reviewing the compensation of the other AFG senior executive officers and overseeing the executive compensation policies of AFG. The AFG Compensation Committee also acts as the oversight committee with respect to AFG’s cash and equity incentive plans, including those in which employees of Great American Life participate. AFG’s Co-CEOs, S. Craig Lindner and Carl H. Lindner III, make recommendations to the AFG Compensation Committee with respect to its awards of long-term equity incentive compensation and determine the compensation of other senior executives of AFG and its subsidiaries, including Great American Life.

Compensation Philosophy and Objectives; Pay for Performance

Like its parent company, Great American Life’s philosophy regarding executive compensation programs focuses on the balance of attracting, motivating, retaining and rewarding executives with a compensation package competitive among its peers, and maximizing shareholder value by designing and implementing programs that tie compensation earned to the short-term and long-term performance of Great American Life. Great American Life’s executive compensation programs are designed to link pay to the long-term performance of AFG and Great American Life.

Guided by principles that reinforce AFG’s pay-for-performance philosophy, compensation for Great American Life’s named executive officers includes base salary and eligibility for annual cash bonuses and long-term equity incentive and other compensation, including certain perquisites. A significant portion of each named executive officer’s compensation is dependent upon Great American Life achieving business and financial goals and the executive achieving individual performance objectives.

Establishing Compensation Levels

The compensation level for S. Craig Lindner is based primarily upon the AFG Compensation Committee’s assessment of his leadership performance and potential to enhance long-term AFG shareholder value. The compensation of AFG’s other named executive officers, including Mr. Berding, is similarly determined by AFG’s Co-CEOs.

The AFG Compensation Committee and AFG’s Co-CEOs analyze peer group and industry pay rates at least annually using relevant published survey sources available. In addition, the AFG Compensation Committee and AFG’s Co-CEOs annually review detailed data compiled on the compensation levels and performances of a comparison group of publicly-held insurance companies (collectively, the “Compensation Peer Group”). The consideration of the compensation levels and performance of the companies in the Compensation Peer Group constitutes just one of many of the factors considered by the AFG Compensation Committee and AFG’s Co-CEOs, and such peer group and industry data is considered generally in making compensation decisions.

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The Compensation Peer Group is annually reviewed and periodically updated by the AFG Compensation Committee. The Compensation Peer Group is designed to consist of companies against which the AFG Compensation Committee believes AFG competes for talent and for shareholder investment and in the marketplace for business

The companies comprising the Compensation Peer Group during 2016 were the following: Alleghany Corporation; Arch Capital Group Ltd.; Assurant Inc.; Chubb Limited; Cincinnati Financial Corporation; CNA Financial Corp.; Endurance Specialty Holdings Ltd.; The Hartford Financial Services Group, Inc.; Lincoln National Corporation; Markel Corporation; RLI Corp.; Voya Financial, Inc.; W. R. Berkley Corporation; and XL Group plc.

Although AFG seeks to offer a level of total compensation to its named executive officers (which includes Mr. S. Craig Lindner and Mr. Berding) that is competitive with the compensation paid by companies in its Compensation Peer Group, AFG does not target or benchmark a particular percentile with respect to our executives’ total pay packages or any individual components of pay.

2016 Compensation Components

For the fiscal year ended December 31, 2016, the principal components of compensation for Great American Life’s named executive officers were:

• base salary;

• annual performance-based cash bonuses;

• long-term incentive compensation;

• retirement and deferred compensation benefits; and

• perquisites and other personal benefits.

Compensation Risk Analysis

The AFG Compensation Committee and AFG’s Co-CEOs have reviewed the risk profile of the components of the executive compensation programs, including the performance objectives and target and maximum levels used in connection with incentive awards. AFG and Great American Life analyze and structure Great American Life’s overall compensation program to discourage excessive risk-taking through a balanced use of compensation vehicles and metrics with an overall goal of delivering sustained long-term shareholder value while aligning executives’ interests with those of AFG shareholders. Further, Great American Life’s program makes a substantial portion of each named executive officer’s compensation contingent on delivering performance results that benefit our shareholders. The AFG Compensation Committee and AFG’s Co-CEOs believe that Great American Life’s executive compensation programs incentivize the appropriate level of risk-taking behavior by Great American Life’s named executive officers needed to grow the business, while encouraging prudent decision-making that focuses on both short-term and long-term results.

Base Salary

AFG and Great American Life pay salaries that are designed to attract and retain superior leaders. After reviewing compiled data and materials as discussed above, the AFG Compensation Committee determined Mr. S. Craig Lindner’s annual base salary based on his responsibilities and performance, and AFG’s Co-CEOs set salaries for the other named executive officers similarly.

Annual Performance-based Cash Bonuses

Annual performance-based cash bonuses are designed to reward current year performance as compared to performance in prior years and its current year performance versus other companies in its market segment. Great American Life believes that the overall performance of AFG is substantially related to the performance of its executives. If earned, cash bonuses are generally paid in the first quarter for the prior year’s performance.

Mr. S. Craig Lindner’s and Mr. Berding’s performance-based cash bonuses are paid under the AFG Annual Senior Executive Bonus Plan, which is described both in the AFG CD&A and below. The performance-based cash bonuses for Mr. Muething, Mr. Miliano and Mr. Prager are paid pursuant to the Annuity Group Executive Officer Bonus Plan, which is described below.

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AFG Senior Executive Annual Bonus Plan—Mr. S. Craig Lindner and Mr. Berding

Consistent with prior years, under the AFG Annual Senior Executive Bonus Plan, the AFG Compensation Committee, working with management, developed for 2016 an annual bonus plan providing that a substantial portion of annual cash compensation is dependent on AFG’s performance. For 2016, the AFG Senior Executive Annual Bonus Plan consisted of four components-Operating EPS, Specialty Property and Casualty Earnings (Specialty P&C Earnings), Annuity Earnings and Discretionary. Mr. Berding was the only named executive officer of Great American Life with a Discretionary component. All goals under the performance metrics were the same for Mr. S. Craig Lindner and Mr. Berding.

AFG Senior Executive Annual Bonus Plan—Operating EPS Component

The largest portion of the annual cash bonus was payable based on AFG’s 2016 Operating EPS calculated consistent with prior years.

Operating EPS differs from AFG’s reported net earnings per share (determined in accordance with generally accepted accounting principles) by excluding realized gains and losses in the investment portfolio and certain other items that may not be indicative of AFG’s ongoing core operations. Further, any special charge taken as a result of an internal review of asbestos and environmental reserves is to be considered a non-core item.

Operating EPS bonuses are awarded based on ranges where Mr. S. Craig Lindner and Mr. Berding can receive between $0 and the maximum bonus.

The determination of bonus amounts under the EPS Component was as follows. For Mr. S. Craig Lindner and Mr. Berding, 100% of the bonus target for the Operating EPS component was to be paid if Operating EPS were $5.55 per share. If Operating EPS was at least $5.00 but less than $5.55 or above $5.55 but less than $6.10, the Operating EPS component of the bonus was to be determined by straight-line interpolation. If Operating EPS was $6.10 or more, the maximum amount was to be paid. For Mr. S. Craig Lindner, the maximum was 175% of the target bonus, and for Mr. Berding, the maximum amount was 150% of the target bonus. For 2016, AFG reported Operating EPS of $6.03. As a result, the AFG Compensation Committee authorized the payment of bonuses for 2016 as follows under the Operating EPS component: $1,240,909 (165% of bonus target) to Mr. S. Craig Lindner; and $790,000 (144% of bonus target) to Mr. Berding.

AFG Senior Executive Annual Bonus Plan—Specialty P&C Earnings Component

For Mr. S. Craig Lindner and Mr. Berding, approximately one-third of the target annual cash bonus was payable based on AFG’s Specialty P&C Earnings for 2016.

Specialty P&C Earnings is defined as core operating earnings before income taxes from the Specialty Property and Casualty Insurance operations as reported in AFG’s quarterly earnings releases, which excludes certain items that may not be indicative of its ongoing core operations such as realized gains and losses and special charges resulting from the recurring periodic review of AFG’s asbestos and environmental exposures.

The determination of bonus amounts under the Specialty P&C Earnings was as follows. For Mr. S. Craig Lindner and Mr. Berding, 85% and 100% of the bonus target for the Specialty P&C Earnings Component was to be paid if Specialty P&C Earnings were $528 million and $574 million, respectively. The maximum bonus of 115% of target would be paid for Specialty P&C Earnings of more than $620 million. Bonuses awarded based on Specialty P&C Earnings above $528 million but less than $574 million or above $574 million but less than $620 million would be determined by straight-line interpolation. For 2016, AFG reported Specialty P&C Earnings of $630 million. As a result, the Compensation Committee authorized the payment of the maximum bonus, representing 115% of the target bonus, for 2016 under the Specialty P&C Earnings component. Mr. S. Craig Lindner received $905,625, and Mr. Berding received $500,250.

AFG Senior Executive Annual Bonus Plan—Annuity Earnings Component

For Mr. S. Craig Lindner and Mr. Berding, approximately one-fourth of the annual cash target bonus was payable based on AFG’s Annuity Earnings for 2016.

Annuity Earnings is defined as core operating earnings before income taxes from the Annuity segment as reported in AFG’s quarterly earnings releases, which excludes certain items that may not be indicative of its ongoing core operations such as realized gains and losses, adjusted to exclude the impact of fair value accounting for fixed-indexed annuities. As with Specialty P&C Earnings, the determination of Annuity Earnings is consistent with AFG’s reporting and excludes certain items that may

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not be indicative of AFG’s core operations such as realized gains and losses and adjustments resulting from the impact of fair value accounting for derivatives related to fixed-indexed annuities.

The determination of bonus amounts under the Annuity Earnings was as follows. For Mr. S. Craig Lindner and Mr. Berding, 85% and 100% of the bonus target for the Annuity Earnings Component was to be paid if Annuity Earnings were $331 million and $360 million, respectively. The maximum bonus of 115% of target would be paid for Annuity Earnings of more than $389 million. Bonuses awarded based on Annuity Earnings above $331 million but less than $360 million or above $360 million but less than $389 million would be determined by straight-line interpolation. For 2016, AFG reported Annuity Earnings of $395 million. As a result, the AFG Compensation Committee authorized the payment of the maximum bonus, representing 115% of the target bonus, for 2016 under the Annuity Earnings component. Mr. S. Craig Lindner received $603,750, and Mr. Berding received $333,500.

AFG Senior Executive Annual Bonus Plan—Discretionary Component

The Discretionary portion of the annual bonus for Mr. Berding (a maximum of $100,000, representing less than 8% of the cumulative target bonus for the other three bonus components and less than 6% of their maximum bonus amounts) was determined by the AFG Co-CEOs, and Mr. Berding was awarded a bonus of $100,000.

Annuity Group Executive Officer Bonus Plan—Mr. Muething, Mr. Miliano and Mr. Prager

Each of Mr. Muething, Mr. Miliano and Mr. Prager were eligible to participate in the Annuity Group Executive Officer Bonus Plan (the “Annuity Group Plan”). Unlike the AFG Annual Senior Executive Bonus Plan which is developed by the AFG Compensation Committee, the Annuity Group Plan is developed and administered solely by AFG’s Co-CEOs. The Annuity Group Plan compensates participants based on Great American Life’s financial and operational performance. Under the Annuity Group Plan, AFG’s Co-CEOs approved a maximum bonus for each participant based on such person’s duties and responsibilities and expected contributions during the year. AFG’s Co-CEOs also reviewed premium, financial and operational goals for Great American Life as well as individual goals for each participant. Based on the specific responsibilities of the participant, AFG’s Co-CEOs allocated a total of 100% among the premium, financial, operational, and individual goals. Based on the attainment of these goals, participants in the Annuity Group Plan could earn up to the maximum bonus amount. The bonuses reported in the Summary Compensation Table on page 71 of this prospectus are for amounts paid to Mr. Muething, Mr. Miliano and Mr. Prager in the first quarter of the subsequent year.

The Annuity Group Plan provides performance-based cash payments to Mr. Muething, Mr. Miliano and Mr. Prager. For Mr. Muething, Mr. Miliano and Mr. Prager, the performance component was determined by AFG’s Co-CEOs based on the performance of Great American Life and AFG’s Co-CEOs’ subjective rating of Mr. Muething, Mr. Miliano and Mr. Prager relative to overall performance for 2016. Mr. Muething, Mr. Miliano and Mr. Prager were eligible to receive maximum bonuses of $633,240, $483,270 and $423,860, respectively.

The determination for Mr. Muething, Mr. Miliano and Mr. Prager includes a consideration of all factors deemed relevant by AFG’s Co-CEOs, including, but not limited to: operational, qualitative measurements relating to the development and implementation of strategic initiatives and annual objectives; responses to unexpected developments; the development of management personnel; and the impact of any extraordinary transactions involving or affecting Great American Life and its subsidiaries. As a result, Mr. Muething, Mr. Miliano and Mr. Prager received the following amounts: $578,760, $441,692 and $384,846, respectively.

Long-Term Equity Incentive Compensation—Broad-based Equity Award

The AFG Compensation Committee awards long-term equity incentive compensation to Great American Life’s named executive officers. The AFG Compensation Committee believes long-term equity incentive compensation encourages management to focus on long-term AFG performance and provides an opportunity for executive officers and certain designated key employees to increase their stake in AFG through equity awards that vest over time.

Equity award levels for participants are determined based on award amounts from previous years, market and peer company data, expense to AFG, the relative benefits to participants of such expense and the overall compensation level of such participants. Equity grants vary among participants based on their positions and responsibilities, and AFG believes that the consideration of these factors results in reasonable grant levels to its named executive officers and other employees. Restricted shares granted in 2016 to the named executive officers are set forth in the Grants of Plan-Based Awards Table on page 72 of this prospectus.

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Equity awards are generally granted at a regularly-scheduled AFG Compensation Committee meeting in February after AFG issues a press release announcing results of the recently ended fiscal year.

Long-Term Equity Incentive Compensation—AFG Senior Executive Equity Bonus Plan

Mr. S. Craig Lindner and Mr. Berding also participate in AFG’s Senior Executive Equity Bonus Plan. Under the AFG Senior Executive Equity Bonus Plan, AFG may grant bonus awards payable in AFG common shares to participants, based upon the achievement of the performance goals determined annually by the AFG Compensation Committee.

Awards paid in 2017 for the three-year period 2014-2016 were based one-half on book value per share growth as compared to the group of companies set forth below (the “plan companies”), with the remaining one-half based on annual return on equity growth.

The group of companies utilized for purposes of determining satisfaction of the book value per share criterion is designed to approximate AFG’s business mix of property and casualty insurance and annuities. The book value per share comparisons, for AFG and each plan company, were adjusted to negate the effects of accounting changes, accumulated other comprehensive income and the impact of dividends and other capital distributions made on common shares.

AFG’s annual return on equity is defined as the percentage equal to AFG’s core operating earnings divided by AFG’s shareholders’ equity (excluding appropriated retained earnings and accumulated other comprehensive income). The applicable percentage in determining bonus amounts, if any, would be the average return on equity for each of the three years in the performance period.

The target amount for Mr. S. Craig Lindner was $2,500,000, and the target amount for Mr. Berding was $750,000, with one-half of each target amount ($1,250,000 and $375,000, respectively) allocated to each of the two performance criteria. The maximum award was 200% of the target amount.

With regard to the book value per share component, if AFG’s growth in book value per share placed it in the fourth (lowest) quartile of the plan companies, no bonus for the book value per share growth metric would be payable to any participant. If AFG’s growth in book value per share exceeded all plan companies, each participant would receive the maximum amount payable for the metric (200% of the target amount). If AFG’s growth in book value per share exceeded the fourth (lowest) quartile of the plan companies but did not exceed that of all plan companies, each participant would be entitled to a bonus amount for the metric calculated by applying straight-line interpolation rounded to the nearest whole dollar amount for growth in book value per share between 0% (for being in the fourth (lowest) quartile of plan companies) and 200% (for growth in book value per share exceeding that of all other plan companies) of the target amount. Plan companies acquired during the three-year performance period are excluded when calculating awards under the plan. In order for a participant to receive the target amount, AFG’s growth in book value per share must be in the top 37.5% of the plan companies.

The plan companies under the Equity Bonus Plan for awards paid with respect to book value per share growth for the three-year period ended December 31, 2016 were:

• Alleghany Corp.

• American Equity Investment Life Holding Co.

• American National Insurance Co.

• Arch Capital Group Ltd.

• Argo Group International Holdings, Ltd.

• Baldwin & Lyons Inc.

• Chubb Limited

• Cincinnati Financial Corp.

• CNA Financial Corporation

• CNO Financial Group, Inc.

• Hanover Insurance Group, Inc.

• The Hartford Financial Services Group, Inc.

• Horace Mann Educators Corp.

• Lincoln National Corp.

• Markel Corporation

• Metlife, Inc.

• National Western Life Group, Inc.

• Protective Life Corp.

• RLI Corp.

• Symetra Financial Corporation

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• Travelers Companies, Inc.

• W.R. Berkley Corporation

• XL Group plc

AFG’s growth in book value per share for the period from January 1, 2014 through December 31, 2016 placed it ninth in comparison to the plan companies (entitling each participant to 51.5% of the target bonus for this component). As a result, Mr. S. Craig Lindner was entitled to a bonus in dollars of $1,287,879 for 2016, and Mr. Berding was entitled to a bonus in dollars of $386,364 for 2016.

The remaining one-half of the bonus amount was based on annual return on equity growth as discussed above. With regard to the 2014-2016 performance period, if the return on equity percentage equaled or exceeded 12%, the participant would receive the maximum bonus amount attributed to this metric. If the return on equity percentage equals or is less than 9%, the participant would receive no bonus amount attributed to this metric. For a return on equity greater than 9% but less than 12%, the bonus amount will be calculated by applying straight-line interpolation rounded to the nearest whole dollar amount. Each participant’s target bonus of 50% of the maximum bonus for the return on equity component would be earned if AFG’s return on equity equaled 10.5% for the three-year period.

AFG’s annual average return on equity for 2014-2016 was 11.5% (entitling each participant to 166.67% of the target bonus for this component). As a result, Mr. S. Craig Lindner was entitled to a bonus in dollars of $2,083,333 for 2016, and Mr. Berding was entitled to a bonus in dollars of $625,000 for 2016.

After combining the two components, Mr. S. Craig Lindner received a bonus of $3,371,212 for 2016, payable (after taxes withheld) through the issuance of 18,394 AFG common shares, and Mr. Berding received a bonus of $1,011,364 for 2016, payable (after taxes withheld) through the issuance of 5,519 AFG common shares. Each participant’s bonus amount represented 134.9% of his target and 67.4% of his maximum bonus under the plan.

Recovery of Prior Awards

AFG does not have a policy with respect to adjustment or recovery of awards or payments if relevant company performance measures upon which previous awards were based are restated or otherwise adjusted in a manner that would reduce the size of such award or payment. Under those circumstances, we expect that the AFG Compensation Committee and AFG’s Co-CEOs would evaluate whether compensation adjustments were appropriate based upon the facts and circumstances surrounding the applicable restatement or adjustment. Nevertheless, AFG is subject to the provisions of Section 304 of the Sarbanes-Oxley Act, with its recoupment requirements. In addition, the Senior Executive Equity Bonus Plan and the Senior Executive Annual Bonus Plan contain specific provisions regarding recovery of awards in the event of restatement of materially inaccurate financial results.

Perquisites and Other Personal Benefits

Perquisites, such as insurance coverage, security services, certain entertainment expenses, administrative staff attending to occasional personal matters, and the personal use of corporate aircraft, are made available to Great American Life’s executive officers. These benefits and the estimated costs to Great American Life of such benefits are included in the All Other Compensation table on page 72 of this prospectus.

During 2016, as in prior years, AFG operated corporate aircraft used for the business travel of senior management of AFG and its subsidiaries. The AFG Board of Directors has encouraged the use of corporate aircraft for the travel needs of Mr. S. Craig Lindner, including personal travel, in order to minimize and more efficiently utilize his travel time, protect the confidentiality of his travel and AFG’s business, and enhance his personal security. Notwithstanding, the AFG Compensation Committee and AFG’s Co-CEOs jointly acknowledge that such aircraft use is a personal benefit, and as such, the AFG Compensation Committee considers the cost to AFG of such use to be an element of the total compensation paid to Mr. S. Craig Lindner.

For Mr. S. Craig Lindner, the AFG Compensation Committee limits personal use of corporate aircraft (120 occupied flight hours). Other perquisites, excluding aircraft, retirement plan and health savings account company match are limited to $500,000 for Mr. Lindner. If exceeded, reimbursement is made based on the cost to AFG of providing the benefits. For taxable benefits, the dollar amounts are included as taxable income to the named executive officers, and AFG does not provide tax gross-up payments for any perquisites. See footnote one to the “All Other Compensation” table on page 72 for a discussion of the tax treatment of aircraft benefits.

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The AFG Compensation Committee believes these perquisites to be reasonable, particularly as a part of total executive compensation, comparable with plan companies and consistent with AFG’s and Great American Life’s overall executive compensation programs.

Change in Control

No named executive officer is a party to an employment or other agreement providing for severance or change in control payments. Awards under the AFG Senior Executive Equity Bonus Plan and AFG’s shareholder-approved equity incentive plans contain provisions for an acceleration of vesting, applicable to all participants, of awards upon a change in control. Rights to acceleration under AFG’s stock incentive plan was modified through the addition of a double trigger for awards granted beginning in 2016.

Executive Compensation

Summary Compensation Table. The following table summarizes the aggregate compensation paid to or earned by the named executive officers, and allocated to Great American Life, for 2016 and 2015. Amounts shown relate to the year indicated, regardless of when paid. Amounts reported for 2015 for each of Messrs. Lindner, Muething, Miliano and Prager reflect an allocation of 88% of their total compensation to Great American Life. Prior to 2016, each such named executive officer had material responsibilities with a business of AFG which was sold at the end of 2015. For 2015, the remaining allocation of each such named executive officer’s compensation was allocated to the sold business. This percentage merely reflects the allocation of compensation expense to Great American Life and is not indicative of the allocation of time and responsibility that each named executive officer devotes to Great American Life as opposed to AFG or other AFG subsidiaries.

Name and Principal Position	Year	Salary ($)(1)	Stock Awards ($)(2)	Option Awards ($)(3)	Non-Equity Incentive Plan Compensation ($)(4)	All Other Compensation ($)(5)	Total ($)
S. Craig Lindner President (Principal Executive Officer)	2016 2015	1,150,000 1,012,000	4,871,340 2,509,470	— 672,760	2,750,284 1,683,000	981,221 895,120	9,752,845 6,772,350
John B. Berding Chief Investment Officer	2016 2015	586,250 569,500	1,280,665 724,066	— 307,329	1,154,912 927,280	66,465 71,237	3,088,292 2,599,412
Mark F. Muething Executive Vice President and Secretary	2016 2015	444,597 379,850	465,107 198,391	— 201,829	578,760 374,583	72,159 58,282	1,560,623 1,212,935
Christopher P. Miliano Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)	2016 2015	412,017 352,014	355,276 152,267	— 154,735	441,692 283,084	65,461 51,693	1,274,446 993,793
Michael J. Prager Chief Actuary	2016 2015	389,164 332,490	270,224 118,924	— 121,097	384,846 246,213	54,044 41,800	1,098,278 860,524

(1) Amounts shown are not reduced to reflect the named executive officers’ elections, if any, to defer receipt of salary into the Deferred Compensation Plan.

(2) Amount represents the dollar amount which will be expensed for financial statement reporting purposes over the vesting period of the award for compensation expense incurred by Great American Life in connection with discretionary restricted stock awards made by the AFG Compensation Committee under the 2005 AFG Stock Incentive Plan and, with respect to Mr. Lindner and Mr. Berding, bonuses under the AFG Senior Executive Equity Bonus Plan in the form of AFG common stock in accordance with FASB ASC 718 (Compensation - Stock Compensation), rather than as an amount paid to or realized.

(3) Amount represents the grant date fair value which will be expensed for financial statement reporting purposes over the vesting period of the options in accordance with ASC 718, rather than an amount paid to or realized by the named executive officer. There can be no assurance that the amounts recognized in accordance with ASC 718 will ever be realized.

(4) These payments were made pursuant to a performance-based annual bonus plan. Amount represents payment for performance in the year indicated, whenever paid, under the AFG Annual Senior Executive Bonus Plan or the Annuity Group Executive Officer Bonus Plan, as applicable.

(5) See All Other Compensation chart below for amounts, which include perquisites, company contributions or allocations under the defined contribution retirement plans and employee savings plan in which the named executive officers participate (and related accruals for their benefit

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under Great American Life’s benefit equalization plan which generally makes up for certain reductions caused by Internal Revenue Code limitations in Great American Life’s contributions to certain of Great American Life’s retirement plans) and company paid group life insurance.

All Other Compensation ($) - 2016

Item	S.C. Lindner (1)(2)	J.B. Berding	M.F. Muething	C.P. Miliano	M.J. Prager
Insurance (Auto/Home Executive Insurance Program)	447,376	16,876	17,859	18,672	11,119
Aircraft Usage	423,696	—	—	—	—
Annual RASP Contribution (3)	19,875	13,316	19,875	19,875	19,875
Annual Auxiliary RASP Contribution	36,750	24,623	30,263	23,435	20,198
Other (4)	111,576	11,650	4,162	3,479	2,852
Totals	981,221	66,465	72,159	65,461	54,044

(1) The Board of Directors has encouraged Mr. Lindner to use corporate aircraft for all travel whenever practicable for productivity, security and confidentiality reasons. On certain occasions, an executive’s spouse, other family members or guests may fly on the corporate aircraft. The value of the use of corporate aircraft is calculated based on the aggregate incremental cost to Great American Life, including fuel costs, trip-related maintenance, universal weather-monitoring costs, on-board catering, landing/ramp fees and other miscellaneous variable costs. Fixed costs which do not change based on usage, such as pilot salaries, the amortized costs of the AFG aircraft, and the cost of maintenance not related to trips, are excluded. Amounts for personal use of company aircraft are included in the table. The amounts reported utilize a different valuation methodology than used for income tax purposes, where the value of the personal use of corporate aircraft has been calculated using the Standard Industry Fare Level (SIFL) formula found in the tax regulations.

(2) All perquisites excluding aircraft, retirement plan and health savings account Company match are limited to $500,000 for Mr. Lindner. Such perquisites totaled $558,052 for 2016, and he reimbursed the Company for the excess. Amounts shown for all items except “Total” do not give effect to the repayment.

(3) Includes a Company match of 100% on the first 3% of contributions, an additional 50% match on the next 3% of contributions and a discretionary Company contribution.

(4) Includes group life insurance, car, parking and related expenses, health savings account Company match, meals and entertainment and administrative and secretarial services.

Grants of Plan-Based Awards. The following table summarizes the grants of plan-based awards to the named executive officers, and allocated to Great American Life.

Name	Grant Date	Estimated Future Payouts Under Non-Equity Incentive Plan Awards			All other Stock Awards: Number of Shares of Stock or Units (#) (1)	Closing Market Price on the Date of Grant ($/Sh)	Grant Date Fair Value of Stock and Option Awards ($)
		Threshold ($)	Target ($)	Maximum ($)
S. Craig Lindner	2/23/2016	—	—	—	22,400	66.79	1,500,128
	2/23/2016 (2)	—	2,062,500	2,821,875	—	—	—
	2/23/2016 (3)	—	2,500,000	5,000,000	—	—	—
John B. Berding	2/23/2016	—	—	—	9,005	66.79	603,065
	2/23/2016 (2)	—	921,250	1,178,363	—	—	—
	2/23/2016 (3)	—	502,500	1,005,000	—	—	—
Mark F. Muething	2/23/2016	—	—	—	6,945	66.79	465,107
	2/23/2016 (2)	—	380,898	633,240	—	—	—
Christopher P. Miliano	2/23/2016	—	—	—	5,305	66.79	355,276
	2/23/2016 (2)	—	290,689	483,270	—	—	—
Michael J. Prager	2/23/2016	—	—	—	4,035	66.79	270,224
	2/23/2016 (2)	—	254,956	423,860	—	—	—

(1) These restricted shares were granted pursuant to AFG’s stock incentive plan and generally vest four years after the grant date. Holders of restricted shares generally have full voting and dividend rights on all restricted shares during the vesting period.

(2) These represent awards under the AFG Senior Executive Annual Bonus Plan and the Annuity Group Executive Officer Bonus Plan. These amounts, to the extent earned and paid in 2017, are shown in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation” because these awards were recognized in 2016 for financial statement reporting purposes.

(3) These represent awards under the Senior Executive Long Term Incentive Compensation Plan. Grants in 2016 cover a three-year performance period 2016 – 2018. One-half of award payment is based on the Company’s growth in book value per share over the three years compared to plan companies, and one-half of award payment is based on meeting or exceeding average annual core return on equity goals over the three-year period. Payment of awards, if any, will be made in early 2019.

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Outstanding Equity Awards at Fiscal Year-End. The table below includes all outstanding AFG common stock awards held by the named executive officers at December 31, 2016.

		Option Awards (1)				Stock Awards
Name	Grant Date	Number of Securities Underlying Unexercised Options Exercisable (#)	Number of Securities Underlying Unexercised Options Unexercisable (#)	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#) (2)	Market Value  of Shares or Units of Stock That Have Not Vested ($)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3)
S. Craig Lindner	02/11/2010	50,000		24.83	02/11/20
	02/16/2011	50,000		34.34	02/16/21
	02/23/2012	40,000	10,000	38.11	02/23/22
	02/21/2013	30,000	20,000	44.01	02/21/23	17,000	1,498,040
	02/24/2014	20,000	30,000	56.44	02/24/24	13,320	1,173,758
	02/23/2015	10,000	40,000	63.15	02/23/25	11,880	1,046,866
	02/23/2016					22,400	1,973,888
	03/07/2014							2,500,000
	03/10/2015							2,500,000
John B. Berding	02/12/2009	25,000		19.10	02/12/19
	02/11/2010	25,000		24.83	02/11/20
	02/16/2011	27,500		34.34	02/16/21
	02/23/2012	24,000	6,000	38.11	02/23/22
	02/21/2013	18,000	12,000	44.01	02/21/23	10,200	898,824
	02/24/2014	12,000	18,000	56.44	02/24/24	7,990	704,079
	02/23/2015	6,000	24,000	63.15	02/23/25	7,130	628,296
	02/23/2016					13,440	1,184,333
	03/07/2014							750,000
	03/10/2015							750,000
Mark F. Muething	02/11/2010	10,504		24.83	02/11/20
	02/16/2011	10,000		34.34	02/16/21
	02/23/2012	9,600	2,400	38.11	02/23/22
	02/21/2013	8,400	5,600	44.01	02/21/23	4,760	419,451
	02/24/2014	5,600	8,400	56.44	02/24/24	3,730	328,688
	02/23/2015	3,000	12,000	63.15	02/23/25	3,570	314,588
	02/23/2016					6,945	611,993
Christopher P. Miliano	02/23/2012		2,000	38.11	02/23/22
	02/21/2013		4,200	44.01	02/21/23	3,570	314,588
	02/24/2014		6,300	56.44	02/24/24	2,800	246,736
	02/23/2015	2,300	9,200	63.15	02/23/25	2,740	241,449
	02/23/2016					5,305	467,477
Michael J. Prager	02/23/2012	7,200	1,800	38.11	02/23/22
	02/21/2013	5,400	3,600	44.01	02/21/23	3,060	269,647
	02/24/2014	3,600	5,400	56.44	02/24/24	2,400	211,488
	02/23/2015	1,800	7,200	63.15	02/23/25	2,140	188,577
	02/23/2016					4,035	355,564

(1) Represents employee stock options that become exercisable for 20% of the shares initially granted on the first anniversary of the date of grant, with an additional 20% becoming exercisable on each subsequent anniversary. They are generally exercisable for ten years. The options become fully exercisable in the event of death or disability or upon a change in control of AFG.

(2) Represents restricted shares which generally vest four years following the award grant date.

(3) Represents target amount for grants made under the AFG Senior Executive Equity Bonus Plan. Awards are denominated in dollars but paid in shares of AFG common stock. The plan will terminate following payment, if any, for the three-year performance period ending December 31, 2017 related to the final awards under the plan made in 2015.

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Option Exercises and Stock Vested. The table below shows the number of shares of AFG common stock acquired during 2016 upon the exercise of options and restricted share awards which vested in 2016.

	Option Awards		Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)(1)	Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($)(2)
S. Craig Lindner	37,500	2,172,582	17,000	1,135,430
John B. Berding	46,324	2,306,670	10,200	681,258
Mark F. Muething	6,398	325,010	4,080	273,238
Christopher P. Miliano	8,100	186,401	3,400	227,698
Michael J. Prager	23,000	951,070	3,060	204,928

(1) The dollar value realized reflects the difference between the closing price of the AFG common stock on the date of exercise and the stock option exercise price.

(2) The dollar value realized reflects the market value of the vested shares based on the closing price of the AFG common stock on the vesting date or, if not a business day, the next succeeding business day.

Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans

Great American Life employees, including the named executive officers, participate in AFG plans described below that provide retirement benefits through a combination of qualified (under the Internal Revenue Code) and nonqualified plans. AFG makes available to certain employees, including the named executive officers, benefits in the AFG Nonqualified Auxiliary RASP (“Auxiliary RASP”). The purpose of the Auxiliary RASP is to enable employees whose contributions are limited by IRS regulations in the retirement contribution portion of the AFG Retirement and Savings Plan (“RASP”) to have an additional benefit to the RASP.

AFG also maintains a Deferred Compensation Plan pursuant to which certain key employees of Great American Life, including the named executive officers, may defer up to 80% of their annual salary and/or bonus. The deferral term of either a fixed number of years or upon termination of employment must be elected at the time of deferral. Under the plan, no federal or state income taxes are paid on deferred compensation. Rather, such taxes will be due upon receipt at the end of the deferral period.

The table below discloses information on the nonqualified deferred compensation of the named executive officers, and allocated to Great American Life, for 2016, including the Auxiliary RASP and the AFG Deferred Compensation Plan.

Name	Executive contributions in last FY ($)	AFG contributions in last FY ($)(1)	Aggregate earnings in last FY ($)(2)	Aggregate withdrawals/ distributions ($)	Aggregate balances at last FYE ($)
S. Craig Lindner	—	36,750	511,547	—	3,415,894
John B. Berding	—	24,623	122,393	—	976,162
Mark F. Muething	181,050	30,263	215,483	—	5,521,035
Christopher P. Miliano	—	23,435	35,080	—	336,739
Michael J. Prager	55,957	20,198	96,971	—	864,192

(1) Represents AFG contributions credited to participants’ Auxiliary RASP accounts which are included in the supplemental All Other Compensation table to the Summary Compensation Table on page 71 of this prospectus.

(2) Earnings are calculated by reference to actual earnings or losses of mutual funds and securities, including AFG common stock, held by the plans.

Compensation Committee Interlocks and Insider Participation

Great American Life does not have a compensation committee. All compensation decisions are made by AFG. Mr. S. Craig Lindner is both an executive officer of Great American Life and an executive officer and director of AFG. No executive officer of Great American Life served as a member of the compensation committee (or its equivalent) or board of directors of another entity that has, or had at any time during 2016, an executive officer who served as a member of the board of directors of Great American Life.

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Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding beneficial ownership of AFG common shares by each of Great American Life’s directors, the named executive officers and by all directors and named executive officers of Great American Life as a group. The table also includes those who are known by Great American Life to own beneficially more than 5% of the issued and outstanding AFG common shares. Except as otherwise provided below, information in the table is as of March 31, 2017 and, to Great American Life’s knowledge, all common shares are beneficially owned, and investment and voting power is held solely by the persons named as owners. The addresses of Carl H. Lindner III, S. Craig Lindner and Edyth B. Lindner are 301 East Fourth Street, Cincinnati, Ohio, 45202

Common Share Ownership	Beneficial Ownership Amount (1)	Percent of Class (* means less than 1%)
S. Craig Lindner (2)	5,797,011	6.6	%
John B. Berding (3)	214,497	*
Jeffrey G. Hester	34,447	*
Christopher P. Miliano	18,979	*
Mark F. Muething	97,932	*
Michael J. Prager	43,218	*
All Directors, Nominees and Named Executive Officers as a Group (6 persons)	6,206,084	7.0	%
Security Ownership of 5% Beneficial Owners
Carl H. Lindner III (4)	7,690,641	8.8	%
Edyth B. Lindner (5)	5,915,325	6.8	%
BlackRock, Inc. (6)	5,481,046	6.3	%
The Vanguard Group (7)	6,086,257	7.0	%

(1) Includes the following numbers of shares that may be acquired within 60 days of March 31, 2017 through the exercise of options held by such person: S. Craig Lindner - 240,000; John B. Berding - 161,500; Jeffrey G. Hester - 27,730; Mark F. Muething - 53,104; Michael J. Prager - 25,200 and Carl H. Lindner III - 240,000. Mr. Berding’s share excludes shares held in AFG’s Retirement and Savings Plan (RASP), for which each serves on the Administrative Plan Committee, other than those shares allocated to his personal RASP account.

(2) Includes 2,569,800 shares held in his trust over which he has voting and dispositive power; 31,551 shares held in the RASP; 113,096 shares held by a trust over which his spouse has voting and dispositive power; 2,324,600 shares owned by a limited liability company and 10,032 shares held in a trust over which he shares voting and dispositive power with Carl H. Lindner III; 331,104 shares held by a charitable foundation over which he shares voting and dispositive power with Edyth B. Lindner; and 176,828 shares held by a charitable foundation over which he shares voting and dispositive power with his spouse.

(3) Common shares include 1,295 shares held in the RASP and 233 shares held by a family trust.

(4) Includes 3,699,772 shares held in his trust over which he holds voting and dispositive power; 37,835 shares held by a trust over which his spouse has voting and dispositive power; 1,248,500 shares held in a limited liability company over which shares he holds dispositive power; 2,324,600 shares owned by a limited liability company and 10,032 shares held in a trust over which he shares voting and dispositive power with S. Craig Lindner; and 129,902 shares held in a charitable foundation over which he shares voting and dispositive power with his spouse.

(5) Includes 5,584,221 shares held in her trust over which she has voting and dispositive power. Also includes 331,104 shares held in a charitable foundation over which she shares voting and dispositive power with S. Craig Lindner.

(6) Based solely on information contained in a Schedule 13G amendment filed with the SEC on January 19, 2017 by BlackRock, Inc. reporting sole voting power of 5,216,823 shares and sole dispositive power of 5,481,046 shares.

(7) Based solely on information contained in a Schedule 13G amendment filed with the SEC on February 9, 2017 by The Vanguard Group reporting sole voting power of 42,654 shares, shared voting power of 7,291 shares, sole dispositive power of 6,040,135 shares and shared dispositive power of 46,122 shares.

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Transactions With Related Persons

Transactions between GALIC and AFG or Other AFG Subsidiaries

GALIC and AMMC are parties to an Investment Services Agreement under which AMMC provides investment services to GALIC in accordance with guidelines. GALIC pays AMMC a fee based on AMMC’s cost of providing these services. Investment charges paid by GALIC to AMMC were $5.3 million in 2016, $4.2 million in 2015 and $1.5 million in 2014.

GALIC is a member of AFG’s consolidated tax group. GALIC has a tax allocation agreement with AFG which designates how tax payments are shared by members of the tax group. In general, both companies compute taxes on a separate return basis. GALIC is obligated to make payments to (or receive benefits from) AFG based on taxable income without regard to temporary differences. GALIC and its subsidiaries, which are included in the AFG consolidated tax group, incurred income tax expense of $133.3 million in 2016, $114.0 million in 2015 and $126.1 million in 2014.

The chart below shows the amounts paid by GALIC to AFG in 2016, 2015 and 2014 for various services. All of these transactions were based on fair market value.

	2016	2015	2014
Information technology services	$5.5 million	$4.8 million	$3.3 million
Business support and human resources services	$3.5 million	$3.0 million	$3.0 million
Internal audit support	$1.3 million	$1.0 million	$1.0 million
Creative marketing services	$0.8 million	$0.8 million	$0.8 million

In July 2000, GAI entered into a thirty-two-year agreement with the Cincinnati Reds, pursuant to which the Reds’ home stadium was named “Great American Ball Park.” GALIC participates in the stadium naming rights agreement and accordingly paid GAI approximately $0.8 million in 2016, $0.8 million in 2015, and $0.8 million in 2014 under the agreement. GALIC’s payments to GAI will average approximately $0.8 million annually over the remaining term of the agreement.

Transactions Involving Immediate Family Members of GALIC’s Directors and Executive Officers

A brother-in-law of GALIC’s President and Chief Executive Officer is a Senior Vice President with Raymond James Financial, Inc. Raymond James received $64,000 in 2016, $76,000 in 2015 and $108,000 in 2014 in commissions for equity transactions made by AFG, including transaction by GALIC and its subsidiaries. In addition , AFG including GALIC and its subsidiaries, traded approximately $230 million in 2016, $147 million in 2015, and $160 million in 2014 par amount of debt securities through Raymond James.

The brother of GALIC’s President and Chief Executive Officer was Co-Chief Executive Officer and Co-President of AFG during 2016, 2015, and 2014. This individual received salary and other compensation of $9,736,384 for 2016, $7,642,021 for 2015 and $7,640,589 for 2014. This individual is also a beneficial owner of more than 5% of the issued and outstanding shares of AFG’s common stock.

A subsidiary of AFG employs a son of GALIC’s President and Chief Executive Officer in an executive position. This individual received salary and bonus of $400,000 for 2016, $250,000 for 2015 and $271,000 for 2014. This individual also participates in employee benefit plans, including equity incentive plans, commensurate with his position and tenure with the subsidiary.

A subsidiary of AFG employs a brother of GALIC’s Executive Vice President and Chief Operating Officer. This individual received salary and bonuses awarded pursuant to short and long term incentive compensation plans of $589,489 for 2016, $631,240 for 2015 and $703,604 for 2014. He also participates in employee benefit plans, including equity incentive plans, commensurate with his position and tenure.

A brother of GALIC’s Executive Vice President and Chief Operating Officer serves as managing partner of Keating Muething & Klekamp PLL and a member of that firm’s Board of Directors. AFG and its subsidiaries paid Keating Muething & Klekamp $1,723,662 in 2016, $1,283,914 in 2015 and $2,039,135 in 2014 for legal services.

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Review, Approval or Ratification of Transactions with Related Persons

Stock exchange rules require AFG to conduct an appropriate review of all related party transactions (including those required to be disclosed by AFG pursuant to SEC Regulation S-K Item 404) for potential conflict of interest situations on an ongoing basis and that all such transactions must be reviewed and evaluated by AFG’s Audit Committee or another committee comprised of independent directors of AFG’s Board of Directors.

AFG’s Audit Committee reviews and evaluates all transactions with related parties. In addition, AFG’s Audit Committee Charter provides that the Audit Committee review and approve all related party transactions involving directors, executive officers and significant shareholders of AFG that require disclosure pursuant to SEC Regulation S-K Item 404. In considering any transaction, the AFG Audit Committee may consider all relevant factors, including as applicable: AFG’s business rationale for entering into the transaction; the alternatives to entering into a related person transaction; whether the transaction is on terms comparable to those available to third parties, or in the case of employment relationships, to employees generally; the potential for the transaction to lead to an actual or apparent conflict of interest and any safeguards imposed to prevent such actual or apparent conflicts; and the overall fairness of the transaction to AFG.

While AFG adheres to this policy for potential related person transactions, the policy is not in written form except as a part of listing agreements with the New York Stock Exchange. However, approval of such related person transactions is evidenced by AFG Audit Committee resolutions in accordance with AFG’s practice of reviewing and approving transactions in this manner.

GALIC’s senior management approves all related party transactions involving directors and executive officers of GALIC, including relevant transactions described in “Transactions Involving Immediate Family Members of GALIC’s Directors and Executive Officers” above. In considering the transaction, GALIC’s senior management may consider all relevant factors, including as applicable: the business rationale for entering into the transaction; the alternatives to entering into a related person transaction; whether the transaction is on terms comparable to those available to third parties, or in the case of employment relationships, to employees generally; the potential for the transaction to lead to an actual or apparent conflict of interest and any safeguards imposed to prevent such actual or apparent conflicts; and the overall fairness of the transaction to GALIC. GALIC’s policy with respect to potential related party transactions is not in written form.

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FINANCIAL INFORMATION

Forward Looking Statements

The disclosures in this Form S-1 contain certain forward-looking statements that are subject to numerous assumptions, risks or uncertainties. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Some of the forward-looking statements can be identified by the use of words such as “anticipates”, “believes”, “expects”, “projects”, “estimates”, “intends”, “plans”, “seeks”, “could”, “may”, “should”, “will” or the negative version of those words or other comparable terminology. Such forward-looking statements include statements relating to: expectations concerning market and other conditions and their effect on future premiums, revenues, earnings and investment activities; recoverability of asset values; and rate changes.

Actual results and/or financial condition could differ materially from those contained in or implied by such forward-looking statements for a variety of reasons including but not limited to the following and those discussed in Risk Factors.

• changes in financial, political and economic conditions, including changes in interest and inflation rates, currency fluctuations and extended economic recessions or expansions in the U.S. and/or abroad;

• performance of securities markets;

• new legislation or declines in credit quality or credit ratings that could have a material impact on the valuation of securities in GALIC’s investment portfolio;

• the availability of capital;

• regulatory actions (including changes in statutory accounting rules);

• changes in the legal environment affecting GALIC or its customers;

• tax law and accounting changes;

• terrorist activities (including any nuclear, biological, chemical or radiological events), incidents of war or losses resulting from civil unrest and other major losses;

• availability of reinsurance and ability of reinsurers to pay their obligations;

• trends in persistency, mortality and morbidity;

• competitive pressures;

• the ability to obtain adequate rates and policy terms; and

• changes in GALIC’s financial strength ratings assigned by major ratings agencies.

The forward-looking statements herein are made only as of the date of this report. GALIC assumes no obligation to publicly update any forward-looking statements.

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Selected Financial Data

The following table sets forth certain data for the periods indicated (dollars in millions).

	Year ended December 31,
	2016		2015		2014		2013		2012
Earnings Statement Data:
Total revenues	$	1,499	$	1,340	$	1,297	$	1,214	$	1,148
Earnings before income taxes	367		319		352		391		319
Net earnings, including noncontrolling interests	240		211		232		255		209
Less: Net earnings attributable to noncontrolling interests	4		6		1		1		—
Net earnings attributable to shareholder	236		205		231		254		209
	December 31,
	2016		2015		2014		2013		2012
									(unaudited)
Balance Sheet Data:
Cash and investments	$	30,976	$	28,026	$	25,402	$	22,356	$	19,715
Total assets	34,362		30,828		28,012		25,045		21,515
Annuity benefits accumulated	29,907		26,622		23,492		20,658		17,308
Life, accident and health reserves	691		705		690		702		676
Shareholder’s equity	2,509		2,293		2,450		2,246		2,317

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

INDEX TO MD&A
	Page		Page
General	82	Contractual Obligations	85
Overview	82	Off-Balance Sheet Arrangements	85
Critical Accounting Policies	82	Investments	85
Liquidity and Capital Resources	82	Uncertainties	89
Condensed Consolidated Cash Flows	83	Results of Operations	89
Liquidity	83

GENERAL

Following is a discussion and analysis of the financial statements and other statistical data that management believes will enhance the understanding of Great American Life Insurance Company’s (“GALIC”) financial condition and results of operations. This discussion should be read in conjunction with the financial statements.

OVERVIEW

Financial Condition

GALIC, a stock life insurance company domiciled in the state of Ohio, is a direct, wholly-owned subsidiary of Great American Financial Resources, Inc. (“GAFRI”), a financial services holding company wholly-owned by American Financial Group, Inc. (“AFG”).

GALIC predominately markets individual and group fixed and fixed-indexed annuities nationwide to the savings and retirement markets, and maintains term and universal life in-force business. GALIC is licensed to write life, annuity and accident & health insurance in forty-nine states, the District of Columbia, Guam and the U.S. Virgin Islands.

CRITICAL ACCOUNTING POLICIES

Significant accounting policies are summarized in Note A — “Accounting Policies” to the financial statements. The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that can have a significant effect on amounts reported in the financial statements. As more information becomes known, these estimates and assumptions change and, thus, impact amounts reported in the future. The areas where management believes the degree of judgment required to determine amounts recorded in the financial statements is most significant are as follows:

• the recoverability of reinsurance,

• the recoverability of deferred acquisition costs, and

• the valuation of investments, including the determination of other-than-temporary impairments.

See “Liquidity and Capital Resources — Uncertainties” for a discussion of recoverables from reinsurers and “Liquidity and Capital Resources — Investments” for a discussion of impairments on investments. Deferred policy acquisition costs (“DPAC”) and certain liabilities related to annuities and universal life insurance products are amortized in relation to the present value of expected gross profits on the policies. Assumptions considered in determining expected gross profits involve significant judgment and include management’s estimates of interest rates and investment spreads, surrenders, annuitizations, renewal premiums and mortality. Should actual experience require management to change its assumptions (commonly referred to as “unlocking”), a charge or credit would be recorded to adjust DPAC or annuity liabilities to the levels they would have been if the new assumptions had been used from the inception date of each policy.

LIQUIDITY AND CAPITAL RESOURCES

Management believes GALIC has sufficient resources to meet its liquidity requirements. The liquidity requirements of GALIC relate primarily to the liabilities associated with its products as well as operating costs and expenses, payment of dividends to GAFRI and taxes to AFG and contributions of capital to its subsidiaries. Historically, cash flows from premiums and investment income have generally provided more than sufficient funds to meet these requirements. Funds received in excess of

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cash requirements are generally invested in additional marketable securities. In addition, GALIC generally holds a significant amount of highly liquid, short-term investments. If funds generated from operations are insufficient to meet liquidity requirements for any period, AFG may contribute funds to GALIC.

The NAIC’s model law for risk based capital (“RBC”) applies to life, accident and health companies. RBC formulas determine the amount of capital that an insurance company needs so that it has an acceptable expectation of not becoming financially impaired. At December 31, 2016, the capital ratios of GALIC and its insurance subsidiaries substantially exceeded the RBC requirements.

Condensed Consolidated Cash FlowsGALIC’s principal sources of cash include insurance premiums, income from its investment portfolio and proceeds from the maturities, redemptions and sales of investments. Insurance premiums in excess of acquisition expenses and operating costs are invested until they are needed to meet policyholder obligations or made available to the parent company through dividends. GALIC’s cash flows from operating, investing and financing activities as detailed in its Consolidated Statement of Cash Flows are shown below (in millions):

	Year ended December 31,
	2016			2015			2014
Net cash provided by operating activities	$	699		$	855		$	570
Net cash used in investing activities	(2,687		)	(3,237		)	(2,529		)
Net cash provided by financing activities	2,225			2,422			1,789
Net change in cash and cash equivalents	$	237		$	40		$	(170	)

Net Cash Provided by Operating Activities   GALIC’s annuity operations typically produce positive net operating cash flows as investment income exceeds acquisition costs and operating expenses. Interest credited on annuity policyholder funds is a non-cash increase in GALIC’s annuity benefits accumulated liability and annuity premiums, benefits and withdrawals are considered financing activities due to the deposit-type nature of annuities. Net cash provided by operating activities was $699 million, $855 million and $570 million in 2016, 2015 and 2014, respectively.

Net Cash Used in Investing Activities   GALIC’s investing activities consist primarily of the investment of funds provided by its annuity products. Net cash used in investing activities was $2.69 billion in 2016 compared to $3.24 billion in 2015, a decrease of $550 million. The decrease in net advances of $195 million from the Federal Home Loan Bank of Cincinnati (“FHLB”) in 2016 compared to 2015 and the $30 million increase in cash dividends paid in 2016 compared to 2015 decreased the amount of cash available for investment in 2016 compared to 2015.

Net cash used in investing activities was $3.24 billion in 2015 compared to $2.53 billion in 2014, an increase of $708 million. The $192 million increase in net cash flows from annuity policyholders in 2015 compared to 2014 and the advances of $345 million from the FHLB in 2015 increased the amount of cash available for investment in 2015 compared to 2014.

Net Cash Provided by Financing Activities   GALIC’s financing activities consist primarily of transactions with annuity policyholders and dividend payments to the parent company. Net cash provided by financing activities was $2.23 billion in 2016 compared to $2.42 billion in 2015, a decrease of $197 million. Annuity receipts and advances from the FHLB exceeded annuity surrenders, benefits, withdrawals and transfers by $2.35 billion in 2016 compared to $2.53 billion in 2015, resulting in a $173 million decrease in net cash provided by financing activities.

Net cash provided by financing activities was $2.42 billion in 2015 compared to $1.79 billion in 2014, an increase of $633 million. Annuity receipts and advances from the FHLB exceeded annuity surrenders, benefits, withdrawals and transfers by $2.53 billion in 2015 compared to $1.99 billion in 2014, resulting in a $537 million increase in net cash provided by financing activities.

Liquidity

Management believes GALIC has sufficient resources to meet its liquidity requirements. If funds generated from operations are insufficient to meet fixed charges in any period, GALIC would be required to utilize company cash and marketable securities or to generate cash through parent capital contributions, sales of other assets, or similar transactions.

GALIC is a member of the FHLB. The FHLB makes advances and provides other banking services to member institutions, which provides GALIC with an additional source of liquidity. These advances further the FHLB’s mission of improving access to housing by increasing liquidity in the residential mortgage-backed securities market. At December 31, 2016, GALIC had

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$935 million in outstanding advances from the FHLB (included in annuity benefits accumulated), bearing interest at rates ranging from 0.03% to 0.53% over LIBOR (average rate of 1.18% at December 31, 2016). In the fourth quarter of 2016, GALIC extended the terms of advances totaling $200 million by four years. While these advances must be repaid between 2018 and 2021 ($285 million in 2018, $500 million in 2020 and $150 million in 2021), GALIC has the option to prepay all or a portion of the advances. GALIC has invested the proceeds from the advances in fixed maturity securities with similar expected lives as the advances for the purpose of earning a spread over the interest payments due to the FHLB. At December 31, 2016, GALIC estimated that it had additional borrowing capacity of approximately $300 million from the FHLB.

The liquidity requirements of GALIC relate primarily to the liabilities associated with its products as well as operating costs and expenses, payments of dividends and taxes to AFG and contributions of capital to its subsidiaries. Historically, cash flows from premiums and investment income have generally provided more than sufficient funds to meet these requirements. Funds received in excess of cash requirements are generally invested in additional marketable securities. In addition, GALIC generally holds a significant amount of highly liquid, short-term investments.

In the annuity business, where profitability is largely dependent on earning a spread between invested assets and annuity liabilities, the duration of investments is generally maintained close to that of liabilities. In a rising interest rate environment, significant protection from withdrawals exists in the form of temporary and permanent surrender charges on GALIC’s annuity products. With declining rates, GALIC receives some protection (from spread compression) due to the ability to lower crediting rates, subject to contractually guaranteed minimum interest rates (“GMIRs”). GALIC began selling policies with GMIRs below 2% in 2003; almost all new business since late 2010 has been issued with a 1% GMIR. At December 31, 2016, GALIC could reduce the average crediting rate on approximately $22 billion of traditional fixed and fixed-indexed annuities without guaranteed withdrawal benefits by approximately 80 basis points (on a weighted average basis).

GALIC’s weighted average cost of funds for newly issued traditional fixed and fixed-indexed annuities was 2.28% for 2016 compared to 2.31% for 2015. In the first half of 2016, GALIC lowered the crediting rates on new annuity sales due to the decline in market investment yields experienced during that period. Conversely, GALIC raised crediting rates on new annuity sales in the latter part of 2016 in response to rising market investment yields. In addition to lowering the cost of funds, GALIC reduced certain commission rates and guaranteed withdrawal benefits on annuities sold in 2016.

For statutory accounting purposes, equity securities of non-affiliates and equity options used in the fixed-indexed annuity business are generally carried at fair value. At December 31, 2016, GALIC owned publicly traded equity securities with a fair value of $495 million and equity options with a fair value of $492 million. Decreases in market prices could adversely affect GALIC’s capital, potentially impacting the amount of dividends available or necessitating a capital contribution. Conversely, increases in market prices could have a favorable impact on GALIC’s dividend-paying capability.

GALIC believes it maintains sufficient liquidity to pay claims and benefits and operating expenses. In addition, GALIC has sufficient capital to meet commitments in the event of unforeseen events such as reinsurer insolvencies. Nonetheless, changes in statutory accounting rules, significant declines in the fair value of its investment portfolios or significant ratings downgrades on these investments, could create a need for additional capital.

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Contractual Obligations The following table shows an estimate (based on historical patterns and expected trends) of payments to be made for insurance reserve liabilities at December 31, 2016 (in millions).

	Total		Within One Year		2-3 Years		4-5 Years		More than 5 Years
Annuities (*)	$	34,004	$	2,523	$	5,987	$	7,189	$	18,305
Life, accident and health liabilities (*)	1,545		126		226		215		978
Total	$	35,549	$	2,649	$	6,213	$	7,404	$	19,283

(*) Amounts presented in the table represent estimated cash payments under such contracts, based on significant assumptions related to mortality, morbidity, lapse, renewal, retirement and annuitization. These assumptions also include interest and index crediting consistent with assumptions used to amortize DPAC and assess loss recognition. All estimated cash payments are undiscounted for the time value of money. As a result, total outflows for all years exceed the corresponding liabilities of $29.91 billion for annuity benefits accumulated and $691 million for life, accident and health reserves included in GALIC’s Balance Sheet as of December 31, 2016. Based on the same assumptions, GALIC projects reinsurance recoveries related to life, accident and health reserves totaling $769 million as follows: Within 1 year — $81 million; 2-3 years — $129 million; 4-5 years — $110 million; and thereafter — $449 million. Actual payments and their timing could differ significantly from these estimates.

GALIC has no material contractual purchase obligations or other long-term liabilities at December 31, 2016.

Off-Balance Sheet Arrangements   See Note L — “Additional Information— Financial Instruments — Unfunded Commitments” to the financial statements.

Investments   GALIC attempts to optimize investment income while building the value of its portfolio, placing emphasis upon total long-term performance.

GALIC’s investment portfolio at December 31, 2016, contained $28.02 billion in fixed maturity securities and $495 million in equity securities classified as available for sale and carried at fair value with unrealized gains and losses included in a separate component of shareholders’ equity on an after-tax basis. In addition, $117 million in fixed maturities were classified as trading with changes in unrealized holding gains or losses included in net investment income.

As detailed in Note D — “Balance Sheet Impact of Net Unrealized Gains on Securities” to the financial statements, unrealized gains and losses on GALIC’s fixed maturity and equity securities are included in shareholders’ equity after adjustments for related changes in DPAC and certain liabilities related to annuity and life businesses and deferred income taxes. DPAC and certain other balance sheet amounts applicable to annuity and life businesses are adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding increases or decreases (net of tax) included in accumulated other comprehensive income in GALIC’s Balance Sheet.

Fixed income investment funds are generally invested in securities with intermediate-term maturities with an objective of optimizing total return while allowing flexibility to react to changes in market conditions. At December 31, 2016, the average life of GALIC’s fixed maturities was about 6.5 years.

Fair values for GALIC’s portfolio are determined by GALIC’s internal investment professionals using data from nationally recognized pricing services as well as non-binding broker quotes. Fair values of equity securities are generally based on published closing prices. For mortgage-backed securities (“MBS”), which comprise approximately 14% of GALIC’s fixed maturities, prices for each security are generally obtained from both pricing services and broker quotes. For the remainder of GALIC’s fixed maturity portfolio, approximately 80% are priced using pricing services and the balance is priced primarily by using non-binding broker quotes. When prices obtained for the same security vary, GALIC’s internal investment professionals select the price they believe is most indicative of an exit price.

The pricing services use a variety of observable inputs to estimate fair value of fixed maturities that do not trade on a daily basis. Based upon information provided by the pricing services, these inputs include, but are not limited to, recent reported trades, benchmark yields, issuer spreads, bids or offers, reference data, and measures of volatility. Included in the pricing of MBS are estimates of the rate of future prepayments and defaults of principal over the remaining life of the underlying collateral. Due to the lack of transparency in the process that brokers use to develop prices, valuations that are based on brokers’ prices are classified as Level 3 in the GAAP hierarchy unless the price can be corroborated, for example, by comparison to similar securities priced using observable inputs.

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Valuation techniques utilized by pricing services and prices obtained from external sources are reviewed by GALIC’s internal investment professionals who are familiar with the securities being priced and the markets in which they trade to ensure the fair value determination is representative of an exit price. To validate the appropriateness of the prices obtained, these investment managers consider widely published indices (as benchmarks), recent trades, changes in interest rates, general economic conditions and the credit quality of the specific issuers. In addition, GALIC communicates directly with pricing services regarding the methods and assumptions used in pricing, including verifying, on a test basis, the inputs used by the services to value specific securities.

In general, the fair value of GALIC’s fixed maturity investments is inversely correlated to changes in interest rates. The following table demonstrates the sensitivity of such fair values to reasonably likely changes in interest rates by illustrating the estimated effect on GALIC’s fixed maturity portfolio that an immediate increase of 100 basis points in the interest rate yield curve would have at December 31, 2016 and 2015 (dollars in millions). Effects of increases or decreases from the 100 basis points illustrated would be approximately proportional.

	December 31,
	2016			2015
Fair value of fixed maturity portfolio	$	28,137		$	25,600
Pretax impact on fair value of fixed maturity portfolio	$	(1,407	)	$	(1,280	)
Percentage impact on fair value of 100 bps increase in interest rates	(5.0		%)	(5.0		%)

Approximately 90% of the fixed maturities held by GALIC at December 31, 2016, were rated “investment grade” (credit rating of AAA to BBB) by nationally recognized rating agencies. Investment grade securities generally bear lower yields and lower degrees of risk than those that are unrated and non-investment grade. Management believes that the high quality investment portfolio should generate a stable and predictable investment return.

MBS are subject to significant prepayment risk due to the fact that, in periods of declining interest rates, mortgages may be repaid more rapidly than scheduled as borrowers refinance higher rate mortgages to take advantage of lower rates. Although interest rates have been low in recent years, tighter lending standards have resulted in fewer buyers being able to refinance the mortgages underlying much of GALIC’s non-agency residential MBS portfolio.

Summarized information for GALIC’s MBS (including those classified as trading) at December 31, 2016, is shown in the table below (dollars in millions). Agency-backed securities are those issued by a U.S. government-backed agency; Alt-A mortgages are those with risk profiles between prime and subprime. The majority of the Alt-A securities and substantially all of the subprime securities are backed by fixed-rate mortgages. The average life of the residential and commercial MBS is approximately 4.5 years and 4 years, respectively.

	Amortized Cost		Fair Value		Fair Value as % of Cost		Unrealized Gain (Loss)		% Rated Investment Grade
Collateral type
Residential:
Agency-backed	$	51	$	52	102	%	$	1	100	%
Non-agency prime	1,219		1,342		110	%	123		31	%
Alt-A	751		809		108	%	58		14	%
Subprime	370		397		107	%	27		28	%
Commercial	1,304		1,349		103	%	45		97	%
	$	3,695	$	3,949	107	%	$	254	51	%

The National Association of Insurance Commissioners (“NAIC”) assigns creditworthiness designations on a scale of 1 to 6 with 1 being the highest quality and 6 being the lowest quality. The NAIC retains third-party investment management firms to assist in the determination of appropriate NAIC designations for mortgage-backed securities based not only on the probability of loss (which is the primary basis of ratings by the major ratings firms), but also on the severity of loss and statutory carrying value. At December 31, 2016, 97% (based on statutory carrying value of $3.7 billion) of GALIC’s MBS had an NAIC designation of 1.

Municipal bonds represented approximately 15% of GALIC’s fixed maturity portfolio at December 31, 2016. GALIC’s municipal bond portfolio is high quality, with 99% of the securities rated investment grade at that date. The portfolio is well

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diversified across the states of issuance and individual issuers. At December 31, 2016, approximately 70% of the municipal bond portfolio was held in revenue bonds, with the remaining 30% held in general obligation bonds. General obligation securities of California, Illinois, Michigan, New Jersey, New York and Puerto Rico collectively represented approximately 1% of this portfolio.

Summarized information for the unrealized gains and losses recorded in GALIC’s Balance Sheet at December 31, 2016, is shown in the following table (dollars in millions). Approximately $220 million of available for sale fixed maturity securities and $22 million of available for sale equity securities had no unrealized gains or losses at December 31, 2016.

	Securities With Unrealized Gains			Securities With Unrealized Losses
Available for Sale Fixed Maturities
Fair value of securities	$	20,181		$	7,619
Amortized cost of securities	$	19,276		$	7,814
Gross unrealized gain (loss)	$	905		$	(195	)
Fair value as % of amortized cost	105		%	98		%
Number of security positions	3,059			892
Number individually exceeding $2 million gain or loss	37			3
Concentration of gains (losses) by type or industry (exceeding 5% of unrealized):
Mortgage-backed securities	$	262		$	(8	)
States and municipalities	155			(42		)
Manufacturing	92			(17		)
Banks, savings and credit institutions	86			(25		)
Gas and electric services	57			(5		)
Asset-backed securities	37			(35		)
Insurance	32			(15		)
Percentage rated investment grade	89		%	91		%
Available for Sale Equity Securities
Fair value of securities	$	347		$	126
Cost of securities	$	289		$	136
Gross unrealized gain (loss)	$	58		$	(10	)
Fair value as % of cost	120		%	93		%
Number of security positions	70			26
Number individually exceeding $2 million gain or loss	7			1

The table below sets forth the scheduled maturities of GALIC’s available for sale fixed maturity securities at December 31, 2016, based on their fair values. Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

	Securities With Unrealized Gains		Securities With Unrealized Losses
Maturity
One year or less	3	%	—	%
After one year through five years	19	%	3	%
After five years through ten years	38	%	44	%
After ten years	10	%	23	%
	70	%	70	%
Asset-backed securities (average life of approximately 5 years)	13	%	24	%
Mortgage-backed securities (average life of approximately 4.5 years)	17	%	6	%
	100	%	100	%

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The table below (dollars in millions) summarizes the unrealized gains and losses on fixed maturity securities by dollar amount:

	Aggregate Fair Value		Aggregate Unrealized Gain (Loss)			Fair Value as % of Cost Basis
Fixed Maturities at December 31, 2016
Securities with unrealized gains:
Exceeding $500,000 (555 securities)	$	7,052	$	538		108	%
$500,000 or less (2,504 securities)	13,129		367			103	%
	$	20,181	$	905		105	%
Securities with unrealized losses:
Exceeding $500,000 (114 securities)	$	1,919	$	(100	)	95	%
$500,000 or less (778 securities)	5,700		(95		)	98	%
	$	7,619	$	(195	)	98	%

The following table summarizes (dollars in millions) the unrealized loss for all securities with unrealized losses by issuer quality and the length of time those securities have been in an unrealized loss position:

	Aggregate Fair Value		Aggregate Unrealized Loss			Fair Value as % of Cost Basis
Securities with Unrealized Losses at December 31, 2016
Investment grade fixed maturities with losses for:
Less than one year (638 securities)	$	6,135	$	(136	)	98	%
One year or longer (106 securities)	782		(26		)	97	%
	$	6,917	$	(162	)	98	%
Non-investment grade fixed maturities with losses for:
Less than one year (91 securities)	$	483	$	(12	)	98	%
One year or longer (57 securities)	219		(21		)	91	%
	$	702	$	(33	)	96	%
Common equity securities with losses for:
Less than one year (19 securities)	$	91	$	(9	)	91	%
One year or longer (1 security)	3		—			100	%
	$	94	$	(9	)	91	%
Perpetual preferred equity securities with losses for:
Less than one year (6 securities)	$	32	$	(1	)	97	%
One year or longer (none)	—		—			—	%
	$	32	$	(1	)	97	%

When a decline in the value of a specific investment is considered to be other-than-temporary, a provision for impairment is charged to earnings (accounted for as a realized loss) and the cost basis of that investment is reduced by the amount of the charge. The determination of whether unrealized losses are other-than-temporary requires judgment based on subjective as well as objective factors.Factors considered and resources used by management include:

a) whether the unrealized loss is credit-driven or a result of changes in market interest rates,

b) the extent to which fair value is less than cost basis,

c) cash flow projections received from independent sources,

d) historical operating, balance sheet and cash flow data contained in issuer SEC filings and news releases,

e) near-term prospects for improvement in the issuer and/or its industry,

f) third party research and communications with industry specialists,

g) financial models and forecasts,

h) the continuity of dividend payments, maintenance of investment grade ratings and hybrid nature of certain investments,

i) discussions with issuer management, and

j) ability and intent to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value.

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Based on its analysis of the factors listed above, management believes GALIC will recover its cost basis in the securities with unrealized losses and that GALIC has the ability to hold the securities until they recover in value and had no intent to sell them at December 31, 2016. Although GALIC has the ability to continue holding its investments with unrealized losses, its intent to hold them may change due to deterioration in the issuers’ creditworthiness, decisions to lessen exposure to a particular issuer or industry, asset/liability management decisions, market movements, changes in views about appropriate asset allocation or the desire to offset taxable realized gains. Should GALIC’s ability or intent change with regard to a particular security, a charge for impairment would likely be required. While it is not possible to accurately predict if or when a specific security will become impaired, charges for other-than-temporary impairment could be material to results of operations in future periods. Significant declines in the fair value of GALIC’s investment portfolio could have a significant adverse effect on GALIC’s liquidity. For information on GALIC’s realized gains (losses) on securities, including charges for other-than-temporary impairment, see “Results of Operations — Realized Gains (Losses) on Securities.”

Uncertainties   GALIC’s businesses are subject to various uncertainties, including regulatory, legislative and tax developments. While it is not possible to predict what changes will come in these areas, some could possibly have a material impact on GALIC and its businesses.

Reinsurance In the normal course of business, GALIC cedes business to other companies under various reinsurance agreements to diversify risk and limit maximum exposure. To the extent that any reinsuring companies are unable to meet obligations under agreements covering reinsurance ceded, GALIC’s insurance companies would remain liable. GALIC reviews the financial condition of its reinsurers and monitors the amount of reinsurance it has with each company. Substantially all of GALIC’s reinsurance is with companies having an A.M. Best rating in the A category. At December 31, 2016, GALIC’s largest reinsurer directly or indirectly accounts for approximately 74% of GALIC’s reinsurance in force and is rated A+ by A.M. Best.

RESULTS OF OPERATIONS

GALIC’s operations produced $367 million in pretax earnings in 2016 compared to $319 million in 2015, an increase of $48 million (15%). This increase reflects growth in the business and higher investment income from certain investments that are required to be carried at fair value through earnings, partially offset by lower investment yields due to the run-off of higher yielding investments and higher general and administrative expenses. Included in these results is the change in fair value of derivatives related to fixed-indexed annuities (“FIAs”), which had a negative impact of $27 million in 2016 compared to $23 million in 2015. For 2016, the negative impact of a significant drop in interest rates on fair value accounting for FIAs was partially offset by the positive impact of an increase in the stock market. For 2015, fair value accounting for FIAs was negatively impacted by a significant decrease in the stock market and a slightly lower than expected increase in interest rates. GALIC’s periodic detailed review (“unlocking”) of the major actuarial assumptions underlying its annuity operations resulted in a net annuity expense reduction of $1 million in 2016 compared to $10 million in 2015.

GALIC’s operations produced $319 million in pretax earnings in 2015 compared to $352 million in 2014, a decrease of $33 million (9%). The growth in the business and the impact that fluctuations in interest rates had on the fair value accounting for FIAs was offset by the negative impact that the stock market decrease had on certain annuity reserves in 2015 compared to a stock market increase in 2014, the run-off of higher yielding investments, higher general and administrative expenses in 2015 compared to 2014 and realized losses on securities in 2015 compared to realized gains on securities in 2014. GALIC’s unlocking of the major actuarial assumptions underlying its annuity operations resulted in a net annuity expense reduction of $10 million in 2015 compared to a net charge of $2 million in 2014.

The following table illustrates the impact of fair value accounting for derivatives related to FIAs on earnings before income taxes (dollars in millions):

	Year ended December 31,									% Change
	2016			2015			2014			2016 - 2015		2015 - 2014
Earnings before income taxes — before the impact of derivatives related to FIAs	$	394		$	342		$	386		15	%	(11	%)
Impact of derivatives related to FIAs	(27		)	(23		)	(34		)	17	%	(32	%)
Earnings before income taxes	$	367		$	319		$	352		15	%	(9	%)

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Net Investment Income

Net investment income in 2016 was $1.38 billion compared to $1.23 billion in 2015, an increase of $146 million (12%). This increase primarily reflects the growth in GALIC’s annuity business and higher income from certain investments that are required to be carried at fair value through earnings, partially offset by the impact of lower in-force investment yields.

Net investment income in 2015 was $1.23 billion compared to $1.14 billion in 2014, an increase of $91 million (8%). This increase primarily reflects the growth in GALIC’s annuity business, partially offset by the run-off of higher yielding investments.

Realized Gains (Losses) on Securities

GALIC’s realized losses on securities were $9 million in 2016 compared to $16 million in 2015, a decrease of $7 million (44%). GALIC’s realized losses on securities were $16 million in 2015 compared to realized gains of $35 million in 2014, a decrease of $51 million (146%). Realized gains (losses) on securities consisted of the following (in millions):

	Year ended December 31,
	2016			2015			2014
Realized gains (losses) before impairments:
Disposals	$	56		$	42		$	46
Change in the fair value of derivatives	(7		)	(2		)	2
Adjustments to annuity deferred policy acquisition costs and related items	(7		)	(5		)	(2		)
	42			35			46
Impairment charges:
Securities	(66		)	(66		)	(16		)
Adjustments to annuity deferred policy acquisition costs and related items	15			15			5
	(51		)	(51		)	(11		)
Realized gains (losses) on securities	$	(9	)	$	(16	)	$	35

Policy Charges and Other Income

Policy charges and other income, which consist primarily of surrender charges and the amortization of deferred upfront policy charges (unearned revenue) and income from the sale of real estate, were $108 million in 2016 compared to $105 million in 2015, an increase of $3 million (3%). Excluding the impact of unlocking charges of $1 million in 2016 and $2 million in 2015 related to unearned revenue, policy charges and other income were $109 million in 2016 and $107 million in 2015, an increase of $2 million (2%). This increase reflects growth in the business primarily related to increased fees from products with guaranteed withdrawal benefit features.

Excluding the impact of unlocking charges of $2 million in 2015 and unlocking income of $10 million in 2014 related to unearned revenue, policy charges and other income were $107 million in 2015 and $90 million in 2014, an increase of $17 million (19%). This increase reflects growth in the business primarily related to increased fees from products with guaranteed withdrawal benefit features and the impact of $6 million in income from the sale of real estate recorded in 2015.

See “Annuity Unlocking” below for a discussion of the impact that the periodic review of actuarial assumptions had on policy charges and other income.

Annuity Benefits

Annuity benefits were $800 million in 2016, $724 million in 2015 and $641 million in 2014, representing an increase of $76 million (10%) in 2016 compared to 2015 and an increase of $83 million (13%) in 2015 compared to 2014. Annuity benefits consisted of the following (dollars in millions):

	Year ended December 31,									% Change
	2016			2015			2014			2016 - 2015		2015 - 2014
Interest credited	$	579		$	529		$	492		9	%	8	%
Change in other benefit reserves	145			131			100			11	%	31	%
Embedded derivative mark-to-market	194			(11		)	240			(1,864	%)	(105	%)
Equity option mark-to-market	(141		)	56			(181		)	(352	%)	(131	%)
Unlocking	23			19			(10		)	21	%	(290	%)
Total annuity benefits	$	800		$	724		$	641		10	%	13	%

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Interest Credited

Interest credited in 2016 was $579 million compared to $529 million in 2015, an increase of $50 million (9%). The impact of growth in the annuity business was partially offset by lower interest crediting rates on new premiums as compared to the crediting rates on policyholder funds surrendered or withdrawn.

Interest credited in 2015 was $529 million compared to $492 million in 2014, an increase of $37 million (8%). The impact of growth in the annuity business was partially offset by lower interest crediting rates on new premiums as compared to the crediting rates on policyholder funds surrendered or withdrawn.

Change in Other Benefit Reserves

Change in other benefit reserves was $145 million in 2016 compared to $131 million in 2015, an increase of $14 million (11%). This increase reflects growth in the business.

Change in other benefit reserves was $131 million in 2015 compared to $100 million in 2014, an increase of $31 million (31%). This increase reflects higher expenses related to products with guaranteed withdrawal benefit features. The fees earned from products with guaranteed withdrawal benefit features is recorded in policy charges and other income.

Change in Fair Value of Derivatives Related to Fixed-Indexed Annuities

GALIC’s fixed-indexed annuities provide policyholders with a crediting rate tied, in part, to the performance of an existing stock market index. GALIC attempts to mitigate the risk in the index-based component of these products through the purchase of call options on the appropriate index. GALIC’s strategy is designed so that the change in the fair value of the call option assets will generally offset the economic change in the liabilities from the index participation. Both the index-based component of the annuities and the related call options are considered derivatives that must be adjusted for changes in fair value through earnings each period. The fair values of these derivatives are impacted by actual and expected stock market performance and interest rates as well as other factors. For a list of other factors impacting the fair value of the index-based component of GALIC’s annuity benefits accumulated, see Note C — “Fair Value Measurements” to the financial statements. Excluding the impact of unlocking charges, the net change in fair value of derivatives related to fixed-indexed annuities increased annuity benefits by $53 million in 2016, $45 million in 2015 and $59 million in 2014. The increase in 2016 is due primarily to significantly lower than expected interest rates, partially offset by the impact of an increase in the stock market. The increase in 2015 reflects the negative impact of the decline in the stock market and lower than anticipated interest rates on these derivatives. The increase in 2014 is due primarily to the impact of lower than anticipated interest rates on these derivatives.

See “Annuity Unlocking” below for a discussion of the impact that the periodic review of actuarial assumptions had on annuity benefits expense.

Insurance Acquisition Expenses, Net

Insurance acquisition expenses, net include amortization of DPAC, amortization of the present value of future profits of business acquired, and non-deferrable expenses and commissions on sales of insurance products.

Excluding the impact of unlocking expense reductions of $25 million in 2016 and $31 million in 2015 and an unlocking charge of $22 million in 2014 (discussed below), insurance acquisition expenses, net, were $210 million in 2016, $197 million in 2015 and $160 million in 2014, representing an increase of $13 million (7%) in 2016 compared to 2015 and an increase of $37 million (23%) in 2015 compared to 2014. Insurance acquisition expenses, net are impacted by (i) material changes in interest rates or the stock market on GALIC’s fixed-indexed annuity business, and (ii) differences in actual experience from actuarially projected estimates and assumptions. For example, the negative impact of significantly lower than anticipated interest rates during 2016, the significant stock market decrease in 2015 and slightly lower than anticipated interest rates during 2014 on the fair value of derivatives related to fixed-indexed annuities (discussed above) resulted in a partially offsetting deceleration in the amortization of DPAC.

See “Annuity Unlocking” below for a discussion of the impact that the periodic review of actuarial assumptions had on insurance acquisition expenses, net. Unanticipated spread compression, decreases in the stock market, adverse mortality experience, and higher than expected lapse rates could lead to write-offs of DPAC or PVFP in the future.

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Other Expenses

Other expenses were $118 million in 2016 compared to $102 million in 2015, an increase of $16 million (16%). Other expenses represent primarily general and administrative expenses, as well as selling and issuance expenses that are not deferred. The increase in other expenses in 2016 compared to 2015 primarily reflects growth in the business as well as an increase in the number of sales personnel focused on new initiatives and increased market share within existing financial institutions and retail marketing associations.

Other expenses were $102 million in 2015 compared to $89 million in 2014, an increase of $13 million (15%). The increase in other expenses in 2015 compared to 2014 is due primarily to higher expenses related to professional services and employee compensation plans and the favorable impact in 2014 of settling certain accrued expenses at a lower cost than previously estimated.

Statutory Annuity Premiums

GALIC’s annuity operations generated statutory premiums of $4.44 billion in 2016, $4.14 billion in 2015 and $3.69 billion in 2014, an increase of $296 million (7%) in 2016 compared to 2015 and an increase of $447 million (12%) in 2015 compared to 2014. The following table summarizes GALIC’s annuity sales (dollars in millions):

	Year ended December 31,						% Change
	2016		2015		2014		2016 - 2015		2015 - 2014
Financial institutions single premium annuities — indexed	$	1,950	$	1,741	$	1,489	12	%	17	%
Financial institutions single premium annuities — fixed	468		229		332		104	%	(31	%)
Retail single premium annuities — indexed	1,714		1,864		1,533		(8	%)	22	%
Retail single premium annuities — fixed	82		69		97		19	%	(29	%)
Education market — fixed and indexed annuities	184		194		194		(5	%)	—	%
Total fixed annuity premiums	4,398		4,097		3,645		7	%	12	%
Variable annuities	37		42		47		(12	%)	(11	%)
Total annuity premiums	$	4,435	$	4,139	$	3,692	7	%	12	%

Management believes the 7% increase in annuity premiums in 2016 compared to 2015 is consistent with overall growth in the annuity industry, as sales of traditional fixed and fixed-indexed annuities have increased while sales of variable annuities have decreased. In addition, the increase reflects new products, additional staffing, and increased market share within existing financial institutions. This growth slowed in the second half of 2016 as a result of GALIC’s reduction in crediting rates on its annuities in 2016 due to the decline in market interest rates; these crediting rate reductions were made to maintain appropriate returns on new business.

Management attributes the 12% increase in annuity premiums in 2015 compared to 2014 to the significant rise of interest rates during the second quarter of 2015 from first quarter 2015 lows, allowing GALIC to raise the crediting rates on its annuities and become more competitive in its markets.

GALIC continues to implement product and process changes needed to comply with the Department of Labor (“DOL”) fiduciary rule and is proceeding under the premise the DOL rule becomes effective in April 2017 in its current form. There is considerable discussion surrounding the possibility of a delay or other action impacting the rule. On February 9, 2017, the DOL filed a notice with the Office of Management and Budget to delay implementation of the regulation. However, until there is some definitive action impacting the rule, GALIC intends to continue to pursue necessary changes.

Assuming the rule becomes effective in its current form, GALIC believes the biggest impact will be on insurance-only licensed agents whose sales represented less than 10% of its fourth quarter annuity premium. While GALIC’s management continues to believe the adjustments required of GALIC and its distribution partners to comply with the rule will impact 2017 annuity premiums, management does not believe the new rule will have a material impact on GALIC’s results of operations.

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Annuity Unlocking

In 2016, 2015 and 2014, GALIC conducted its detailed review (“unlocking”) of the major actuarial assumptions underlying its annuity operations. As a result of these reviews, GALIC recorded a net expense reduction related to its annuity business of $1 million in 2016 and $10 million in 2015 and net charges of $2 million in 2014, which impacted GALIC’s financial statements as follows (in millions):

	Year ended December 31,
	2016			2015			2014
Policy charges and other income:
Unearned revenue	$	(1	)	$	(2	)	$	10
Total revenues	(1		)	(2		)	10
Annuity benefits:
Fixed-indexed annuities embedded derivative	17			28			(58		)
Sales inducements	(4		)	(4		)	1
Other reserves	10			(5		)	47
Total annuity benefits	23			19			(10		)
Insurance acquisition expenses, net:
Deferred policy acquisition costs	(25		)	(31		)	22
Total costs and expenses	(2		)	(12		)	12
Net expense reduction (charge)	$	1		$	10		$	(2	)

The net expense reduction from unlocking annuity assumptions in 2016 reflects the favorable impact of an increase in projected net interest spreads on in-force business, substantially offset by the unfavorable impact of (i) changes in projected policyholder annuitization and lapse behavior, (ii) an increase in the risk premium for the uncertainty in the cash flows component of the discount rates used to value the FIA-related embedded derivative and (iii) a slight decrease in projected stock market growth over the next three years. Reinvestment rate assumptions are based primarily on 7-year and 10-year corporate bond yields. For the 2016 unlocking, GALIC assumed a net reinvestment rate (net of default and expense assumptions) of 4.24% in 2017, grading up ratably to an ultimate net reinvestment rate of 5.55% in 2022 and beyond.

The table below compares the reinvestment rate assumed in GALIC’s unlockings for the next calendar year to the actual reinvestment rate achieved in that period (both net of investment expenses):

	First
Unlocking	Investment	Reinvestment Rate
Year	Period	Assumed (*)		Achieved
2014	2015	3.75	%	4.27	%
2015	2016	4.05	%	4.27	%
2016	2017	4.42	%	n/a

(*) Assumed reinvestment rates exclude default rates of 0.18% in each period.

Management believes that these results demonstrate that GALIC’s reinvestment rate assumptions are reasonable and prudently conservative. In addition to the reinvestment rates above, actual default rates in 2015 and 2016 were lower than the long-term default rates of 0.18% assumed in the unlocking in each of the periods above.

The 2015 net expense reduction was due primarily to the impact of changes in assumptions to reflect higher than previously projected net interest spreads as well as the impact of higher assets under management and expense discipline. For the 2015 unlocking, GALIC assumed a net reinvestment rate (net of default and expense assumptions) of 3.87% in 2016, grading up ratably to an ultimate net reinvestment rate of 5.53% in 2022 and beyond.

The 2014 net charge was due primarily to the impact of changes in assumptions to reflect lower future investment yield assumptions, partially offset by a decrease in future expected call option costs related to the fixed-indexed annuity business and lower lapses. For the 2014 unlocking, GALIC assumed a net reinvestment rate (net of default and expense assumptions) of 3.57% in 2015, grading up ratably to an ultimate net reinvestment rate of 5.54% in 2022 and beyond.

93

Income TaxesGALIC’s provision for income taxes was $127 million in 2016 compared to $108 million in 2015, an increase of $19 million (18%). GALIC’s provision for income taxes was $108 million in 2015 compared to $120 million in 2014, a decrease of $12 million (10%). See NoteI — “Income Taxes” to the financial statements for an analysis of items affecting GALIC’s effective tax rate.

Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the potential economic loss arising from adverse changes in the fair value of financial instruments. GALIC’s exposures to market risk relate primarily to its investment portfolio and annuity contracts, which are exposed to interest rate risk and, to a lesser extent, equity price risk.

Fixed Maturity Portfolio   The fair value of GALIC’s fixed maturity portfolio is directly impacted by changes in market interest rates. GALIC’s fixed maturity portfolio is comprised of primarily fixed-rate investments with intermediate-term maturities. This practice is designed to allow flexibility in reacting to fluctuations of interest rates. The portfolios of GALIC’s operations are managed with an attempt to achieve an adequate risk-adjusted return while maintaining sufficient liquidity to meet policyholder obligations. GALIC’s operations attempt to align the duration of their invested assets to the projected cash flows of policyholder liabilities.

Consistent with the discussion inManagement’s Discussion and Analysis — “Investments,” the following table demonstrates the sensitivity of the fair value of GALIC’s fixed maturity portfolio to reasonably likely changes in interest rates by illustrating the estimated effect on GALIC’s fixed maturity portfolio that an immediate increase of 100 basis points in the interest rate yield curve would have at December 31 (based on the duration of the portfolio, dollars in millions). Effects of increases or decreases from the 100 basis points illustrated would be approximately proportional.

	December 31,
	2016			2015
Fair value of fixed maturity portfolio	$	28,137		$	25,600
Pretax impact on fair value of fixed maturity portfolio	$	(1,407	)	$	(1,280	)
Percentage impact on fair value of 100 bps increase in interest rates	(5.0		%)	(5.0		%)

Certain European countries, including the so-called “peripheral countries” (Greece, Portugal, Ireland, Italy and Spain) have been experiencing varying degrees of financial stress over the past few years and there remains uncertainty as to future developments and the impact on global financial markets. At December 31, 2016, approximately 6% of GALIC’s cash and investments consisted of European debt and GALIC owned no sovereign debt issued by the peripheral countries.

Annuity Contracts Substantially all of GALIC’s fixed rate annuity contracts permit GALIC to change crediting rates (subject to minimum interest rate guarantees as determined by applicable law) enabling management to react to changes in market interest rates. In late 2003, GALIC began issuing products with guaranteed minimum interest rates (“GMIRs”) of less than 2% in states where required approvals have been received. The GMIR on virtually all new product sales since 2010 is 1%. At December 31, 2016, GALIC is able to reduce the average crediting rate on approximately $22 billion of traditional fixed and fixed-indexed annuities without guaranteed withdrawal benefits by approximately 80 basis points (on a weighted average basis).

The interest credited rate as a percent of fixed annuity benefits accumulated on GALIC’s in-force block of fixed annuities was 2.04% for the year ended December 31, 2016. Management estimates that the interest credited rate on this in-force business will range from 2.00% to 2.10% over the next five years. This rate reflects actuarial assumptions as to (i) expected investment spreads, (ii) deaths, (iii) annuitizations, (iv) surrenders and other withdrawals and (v) renewal premiums. Actual experience and changes in actuarial assumptions may result in different effective crediting rates than those above.

Actuarial assumptions used to estimate DPAC and certain annuity liabilities, as well as GALIC’s ability to maintain spread, could be impacted if a low interest rate environment continues for an extended period, or if increases in interest rates cause policyholder behavior to differ significantly from current expectations.

94

Projected payments (in millions) in each of the subsequent five years and for all years thereafter on GALIC’s fixed annuity liabilities at December 31 were as follows.

	First		Second		Third		Fourth		Fifth		Thereafter		Total		Fair Value (*)
2016	$	2,523	$	2,856	$	3,131	$	3,442	$	3,747	$	18,305	$	34,004	$	28,932
2015	2,070		2,380		2,710		2,817		3,035		19,268		32,280		25,488

(*) Fair value of annuity benefits accumulated excluding life contingent annuities in the payout phase (carrying value of $204 million at December 31, 2016 and $200 million at December 31, 2015).

GALIC’s fixed-indexed annuities provide policyholders with a crediting rate tied, in part, to the performance of an existing stock market index. GALIC attempts to mitigate the risk in the index-based component of these products through the purchase of call options on the appropriate index. GALIC’s strategy is designed so that the change in fair value of the call option assets will generally offset the economic change in the liabilities from the index participation. Both the index-based component of the annuities and the related call options are considered derivatives that must be adjusted for changes in fair value through earnings each period. See Note C — “Fair Value Measurements” and Note F — “Derivatives” to the financial statements for a discussion of these derivatives.

Financial Statements and Supplementary Data

Financial statements of Great American Life Insurance Company and supplementary data are included in Appendix A to this prospectus. The table of contents for Appendix A is set out below.

	Page
Report of Independent Registered Public Accounting Firm	A-1
Financial Statements:
Consolidated Balance Sheet as of December 31, 2016 and 2015	A-2
Consolidated Statement of Earnings for the years ended December 31, 2016, 2015 and 2014	A-3
Consolidated Statement of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014	A-4
Consolidated Statement of Changes in Equity for the years ended December 31, 2016, 2015 and 2014	A-5
Consolidated Statement of Cash Flows for the years ended December 31, 2016, 2015 and 2014	A-6
Notes to Consolidated Financial Statements	A-7
Supplementary Data:
Supplementary Insurance Information	A-29

95

The Registration Statement

We filed a Registration Statement with the Securities and Exchange Commission under the Securities Act of 1933 relating to the Contracts offered by this prospectus. This prospectus was filed as a part of the Registration Statement, but it does not constitute the complete Registration Statement. The Registration Statement contains further information relating to the Company and the Contracts. The Registration Statement and the exhibits thereto may be inspected and copied at the office of the Securities and Exchange Commission, located at 100 F Street, N.E., Washington, D.C., and may also be accessed at www.sec.gov. The Securities and Exchange Commission file number for the Contract is 333-207914.

Statements in this prospectus discussing the content of the Contracts and other legal instruments are summaries. The actual documents are filed as exhibits to the Registration Statement. For a complete statement of the terms of the Contracts or any other legal document, refer to the appropriate exhibit to the Registration Statement.

96

APPENDIX A: FINANCIAL STATEMENTS

GREAT AMERICAN LIFE INSURANCE COMPANY

Financial Statements

Years ended December 31, 2016, 2015 and 2014

with Report of Independent Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholder

Great American Life Insurance Company

We have audited the accompanying consolidated balance sheets of Great American Life Insurance Company and subsidiaries (the Company), an indirect wholly-owned subsidiary of American Financial Group, Inc., as of December 31, 2016 and 2015, and the related consolidated statements of earnings, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2016. Our audits included the accompanying financial statement schedule. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Great American Life Insurance Company and subsidiaries at December 31, 2016 and 2015, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

	/s/ ERNST & YOUNG LLP
Cincinnati, Ohio
April 17, 2017

A-1

GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Dollars in Millions, Except Per Share Data)

	December 31,
	2016		2015
Assets:
Cash and cash equivalents	$	499	$	262
Investments:
Fixed maturities, available for sale at fair value (amortized cost — $27,310 and $24,903)	28,020		25,486
Fixed maturities, trading at fair value	117		114
Equity securities, available for sale at fair value (cost — $447 and $489)	495		486
Mortgage loans	890		880
Policy loans	192		201
Real estate and other investments	763		597
Total cash and investments	30,976		28,026
Recoverables from reinsurers	343		355
Deferred policy acquisition costs (including the impact of unrealized gains on securities of $273 and $233)	997		954
Accrued investment income	262		242
Variable annuity assets (separate accounts)	600		608
Equity options — fixed-indexed annuities	492		241
Funds held as collateral	380		211
Other assets	312		191
Total assets	$	34,362	$	30,828
Liabilities and Equity:
Annuity benefits accumulated (including the impact of unrealized gains on securities of $78 and $64)	$	29,907	$	26,622
Life, accident and health reserves	691		705
Variable annuity liabilities (separate accounts)	600		608
Liability for funds held as collateral	380		211
Net deferred tax liabilities	10		31
Other liabilities	207		303
Total liabilities	31,795		28,480
Shareholder’s equity:
Common Stock, par value — $12.50 per share: — 1,200,000 shares authorized — 201,000 shares issued and outstanding	3		3
Capital surplus	938		892
Retained earnings	1,302		1,206
Accumulated other comprehensive income, net of tax	266		192
Total shareholder’s equity	2,509		2,293
Noncontrolling interests	58		55
Total equity	2,567		2,348
Total liabilities and equity	$	34,362	$	30,828

See notes to consolidated financial statements.

A-2

GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EARNINGS

(In Millions)

	Year ended December 31,
	2016			2015			2014
Revenues:
Net investment income	$	1,376		$	1,230		$	1,139
Realized gains (losses) on securities (*)	(9		)	(16		)	35
Life, accident and health net earned premiums	24			21			23
Policy charges and other income	108			105			100
Total revenues	1,499			1,340			1,297
Costs and Expenses:
Annuity benefits	800			724			641
Life, accident and health benefits	29			29			33
Insurance acquisition expenses, net	185			166			182
Other expenses	118			102			89
Total costs and expenses	1,132			1,021			945
Earnings before income taxes	367			319			352
Provision for income taxes	127			108			120
Net earnings, including noncontrolling interests	240			211			232
Less: Net earnings attributable to noncontrolling interests	4			6			1
Net Earnings Attributable to Shareholder	$	236		$	205		$	231
________________________________________
(*) Consists of the following:
Realized gains before impairments	$	42		$	35		$	46
Losses on securities with impairment	(51		)	(51		)	(11		)
Non-credit portion recognized in other comprehensive income (loss)	—			—			—
Impairment charges recognized in earnings	(51		)	(51		)	(11		)
Total realized gains (losses) on securities	$	(9	)	$	(16	)	$	35

See notes to consolidated financial statements.

A-3

GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(In Millions)

	Year ended December 31,
	2016			2015			2014
Net earnings, including noncontrolling interests	$	240		$	211		$	232
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities:
Unrealized holding gains (losses) on securities arising during the period	76			(286		)	185
Reclassification adjustment for realized (gains) losses included in net earnings	6			8			(23		)
Total net unrealized gains (losses) on securities	82			(278		)	162
Net unrealized gains (losses) on cash flow hedges	(8		)	1			—
Other comprehensive income (loss), net of tax	74			(277		)	162
Total comprehensive income (loss), net of tax	314			(66		)	394
Less: Comprehensive income attributable to noncontrolling interests	4			6			1
Comprehensive income (loss) attributable to shareholder	$	310		$	(72	)	$	393

See notes to consolidated financial statements.

A-4

GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Dollars in Millions)

		Shareholder’s Equity
	Common Shares	Common Stock and Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total			Noncontrolling Interests			Total Equity
Balance at December 31, 2013	201,000	$	859	$	1,080		$	307		$	2,246		$	40		$	2,286
Net earnings	—	—		231			—			231			1			232
Other comprehensive income	—	—		—			162			162			—			162
Capital contributions from parent	—	10		—			—			10			—			10
Dividends	—	—		(200		)	—			(200		)	—			(200		)
Other	—	1		—			—			1			1			2
Balance at December 31, 2014	201,000	$	870	$	1,111		$	469		$	2,450		$	42		$	2,492
Net earnings	—	—		205			—			205			6			211
Other comprehensive loss	—	—		—			(277		)	(277		)	—			(277		)
Capital contributions from parent	—	24		—			—			24			—			24
Dividends	—	—		(110		)	—			(110		)	—			(110		)
Other	—	1		—			—			1			7			8
Balance at December 31, 2015	201,000	$	895	$	1,206		$	192		$	2,293		$	55		$	2,348
Net earnings	—	—		236			—			236			4			240
Other comprehensive income	—	—		—			74			74			—			74
Capital contributions from parent	—	45		—			—			45			—			45
Dividends	—	—		(140		)	—			(140		)	—			(140		)
Other	—	1		—			—			1			(1		)	—
Balance at December 31, 2016	201,000	$	941	$	1,302		$	266		$	2,509		$	58		$	2,567

See notes to consolidated financial statements.

A-5

GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(In Millions)

	Year ended December 31,
	2016			2015			2014
Operating Activities:
Net earnings, including noncontrolling interests	$	240		$	211		$	232
Adjustments:
Depreciation and amortization	(75		)	(67		)	(85		)
Annuity benefits	800			724			641
Realized (gains) losses on investing activities	9			16			(35		)
Net (purchases) sales of trading securities	(2		)	7			1
Deferred annuity and life policy acquisition costs	(229		)	(224		)	(198		)
Amortization of insurance acquisition costs	152			139			161
Change in:
Reinsurance recoverable	12			13			6
Accrued investment income	(20		)	(30		)	(17		)
Funds held as collateral	(169		)	74			—
Other assets	(57		)	1			(9		)
Life, accident and health reserves	(14		)	15			(12		)
Liability for funds held as collateral	169			(74		)	—
Other liabilities	(83		)	48			(113		)
Other operating activities, net	(34		)	2			(2		)
Net cash provided by operating activities	699			855			570
Investing Activities:
Purchases of:
Fixed maturities	(6,186		)	(5,450		)	(4,419		)
Equity securities	(72		)	(266		)	(136		)
Mortgage loans	(213		)	(197		)	(323		)
Other investments	(320		)	(272		)	(189		)
Real estate, property and equipment	(16		)	(48		)	(12		)
Equity options — fixed-indexed annuities	(358		)	(301		)	(221		)
Proceeds from:
Maturities and redemptions of fixed maturities	3,259			2,194			2,014
Repayments of mortgage loans	203			209			98
Sales of fixed maturities	528			281			103
Sales of equity securities	96			106			45
Sales of other investments	171			146			145
Sales of real estate, property and equipment	14			26			5
Exercise of equity options — fixed-indexed annuities	248			326			352
Other investing activities, net	(41		)	9			9
Net cash used in investing activities	(2,687		)	(3,237		)	(2,529		)
Financing Activities:
Annuity receipts	4,435			4,139			3,692
Annuity surrenders, benefits and withdrawals	(2,275		)	(2,002		)	(1,747		)
Net transfers from variable annuity assets	42			43			43
Advances from Federal Home Loan Bank	150			345			—
Capital contributions from parent	15			—			—
Cash dividends paid	(140		)	(110		)	(200		)
Other financing activities, net	(2		)	7			1
Net cash provided by financing activities	2,225			2,422			1,789
Net Change in Cash and Cash Equivalents	237			40			(170		)
Cash and cash equivalents at beginning of period	262			222			392
Cash and cash equivalents at end of period	$	499		$	262		$	222

See notes to consolidated financial statements.

A-6

GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO NOTES
		Page			Page
A.	Accounting Policies	A-7	G.	Deferred Policy Acquisition Costs	A-24
B.	Segments of Operations	A-11	H.	Shareholder’s Equity	A-25
C.	Fair Value Measurements	A-11	I.	Income Taxes	A-26
D.	Balance Sheet Impact of Net Unrealized Gains on Securities	A-17	J.	Contingencies	A-27
E.	Investments	A-18	K.	Insurance	A-27
F.	Derivatives	A-22	L.	Additional Information	A-28

A.     Accounting Policies

Basis of Presentation   The consolidated financial statements include the accounts of Great American Life Insurance Company and its subsidiaries (“GALIC” or the “Company”). GALIC is a direct wholly-owned subsidiary of Great American Financial Resources, Inc. (“GAFRI”), a financial services holding company wholly-owned by American Financial Group, Inc. (“AFG”).

Certain reclassifications have been made to prior years to conform to the current year’s presentation. All significant intercompany balances and transactions have been eliminated. The results of operations of companies since their formation or acquisition are included in the consolidated financial statements. The financial statements also include costs paid on behalf of GALIC by GAFRI. These costs are recorded as expense in the period incurred and shown as an increase in capital surplus. Events or transactions occurring subsequent to the audited consolidated financial statements as of and for the year ended December 31, 2016, and prior to April 17, 2017, have been evaluated for potential recognition or disclosure herein.

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Changes in circumstances could cause actual results to differ materially from those estimates.

Fair Value Measurements   Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The standards establish a hierarchy of valuation techniques based on whether the assumptions that market participants would use in pricing the asset or liability (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect GALIC’s assumptions about the assumptions market participants would use in pricing the asset or liability. GALIC did not have any significant nonrecurring fair value measurements of nonfinancial assets and liabilities in 2016 or 2015.

Investments   Fixed maturity and equity securities classified as “available for sale” are reported at fair value with unrealized gains and losses included in accumulated other comprehensive income (“AOCI”) in GALIC’s Balance Sheet. Fixed maturity securities classified as “trading” are reported at fair value with changes in unrealized holding gains or losses during the period included in net investment income. Mortgage and policy loans are carried primarily at the aggregate unpaid balance.

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, which, among other things, will require all equity securities currently classified as “available for sale” to be reported at fair value, with holding gains and losses recognized in net income, instead of AOCI. GALIC will be required to adopt this guidance effective January 1, 2018.

Premiums and discounts on fixed maturity securities are amortized using the interest method. Mortgage-backed securities (“MBS”) are amortized over a period based on estimated future principal payments, including prepayments. Prepayment assumptions are reviewed periodically and adjusted to reflect actual prepayments and changes in expectations.

Gains or losses on securities are determined on the specific identification basis. When a decline in the value of a specific investment is considered to be other-than-temporary at the balance sheet date, a provision for impairment is charged to earnings (included in realized gains (losses) on securities) and the cost basis of that investment is reduced. If management can assert that it does not intend to sell an impaired fixed maturity security and it is not more likely than not that it will have to sell the security before recovery of its amortized cost basis, then the other-than-temporary impairment is separated into two components: (i) the amount related to credit losses (recorded in earnings) and (ii) the amount related to all other factors (recorded in other comprehensive income). The credit-related portion of an other-than-temporary impairment is measured by comparing a

A-7

GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

security’s amortized cost to the present value of its current expected cash flows discounted at its effective yield prior to the impairment charge. Both components are shown in the Statement of Earnings. If management intends to sell an impaired security, or it is more likely than not that it will be required to sell the security before recovery, an impairment charge to earnings is recorded to reduce the amortized cost of that security to fair value.

Derivatives Derivatives included in GALIC’s Balance Sheet are recorded at fair value. Changes in fair value of derivatives are included in earnings, unless the derivatives are designated and qualify as highly effective cash flow hedges. Derivatives that do not qualify for hedge accounting under GAAP consist primarily of (i) components of certain fixed maturity securities (primarily interest-only MBS) and (ii) the equity-based component of certain annuity products (included in annuity benefits accumulated) and related equity index call options designed to be consistent with the characteristics of the liabilities and used to mitigate the risk embedded in those annuity products.

To qualify for hedge accounting, at the inception of a derivative contract, GALIC formally documents the relationship between the terms of the hedge and the hedged items and its risk management objective. This documentation includes defining how hedge effectiveness and ineffectiveness will be measured on a retrospective and prospective basis.

Changes in the fair value of derivatives that are designated and qualify as highly effective cash flow hedges are recorded in AOCI and are reclassified into earnings when the variability of the cash flows from the hedged items impacts earnings. Any hedge ineffectiveness is immediately recorded in current period earnings. When the change in the fair value of a qualifying cash flow hedge is included in earnings, it is included in the same line item in the Statement of Earnings as the cash flows from the hedged item. GALIC uses interest rate swaps that are designated and qualify as highly effective cash flow hedges to mitigate interest rate risk related to certain floating-rate securities included in GALIC’s portfolio of fixed maturity securities.

Funds Held as Collateral   GALIC receives collateral from its counterparties to support its purchased equity index call option assets. The fair value of this collateral is recorded as an asset and the offsetting obligation to return the collateral is recorded as a liability.

Reinsurance Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policies. A GALIC subsidiary cedes life insurance policies to a third party on a funds withheld basis whereby the subsidiary retains the assets (securities) associated with the reinsurance contract. Interest is credited to the reinsurer based on the actual investment performance of the retained assets. This reinsurance contract is considered to contain an embedded derivative (that must be adjusted to fair value) because the yield on the payable is based on a specific block of the ceding company’s assets, rather than the overall creditworthiness of the ceding company. GALIC determined that changes in the fair value of the underlying portfolio of fixed maturity securities is an appropriate measure of the value of the embedded derivative. The securities related to this contract are classified as “trading.” The adjustment to fair value on the embedded derivative offsets the investment income recorded on the adjustment to fair value of the related trading portfolio.

Deferred Policy Acquisition Costs (“DPAC”)   Policy acquisition costs (principally commissions, premium taxes and certain underwriting and policy issuance costs) directly related to the successful acquisition or renewal of an insurance contract are deferred. DPAC also includes capitalized costs associated with sales inducements offered to fixed annuity policyholders such as enhanced interest rates and premium and persistency bonuses.

DPAC related to annuities is deferred to the extent deemed recoverable and amortized, with interest, in relation to the present value of actual and expected gross profits on the policies. Expected gross profits consist principally of estimated future investment margin (estimated future net investment income less interest credited on policyholder funds) and surrender, mortality, and other life and annuity policy charges, less death, annuitization and guaranteed withdrawal benefits in excess of account balances and estimated future policy administration expenses. To the extent that realized gains and losses result in adjustments to the amortization of DPAC related to annuities, such adjustments are reflected as components of realized gains (losses) on securities.

DPAC related to traditional life and health insurance is amortized over the expected premium paying period of the related policies, in proportion to the ratio of annual premium revenues to total anticipated premium revenues. See “Life, Accident and Health Reserves” below for details on the impact of loss recognition on the accounting for traditional life and health insurance contracts.

DPAC includes the present value of future profits on business in force of annuity and life, accident and health insurance companies acquired (“PVFP”). PVFP represents the portion of the costs to acquire companies that is allocated to the value of

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the right to receive future cash flows from insurance contracts existing at the date of acquisition. PVFP is amortized with interest in relation to expected gross profits of the acquired policies for annuities and universal life products and in relation to the premium paying period for traditional life and health insurance products.

DPAC and certain other balance sheet amounts related to annuity and life businesses are also adjusted, net of tax, for the change in expense that would have been recorded if the unrealized gains (losses) from securities had actually been realized. These adjustments are included in unrealized gains (losses) on marketable securities, a component of AOCI in GALIC’s Balance Sheet.

Annuity Benefits Accumulated   Annuity receipts and benefit payments are recorded as increases or decreases in annuity benefits accumulated rather than as revenue and expense. Increases in this liability for interest credited are charged to annuity benefits expense and decreases for policy charges are recorded as annuity policy charges revenue.

For certain products, annuity benefits accumulated also includes reserves for accrued persistency and premium bonuses, guaranteed withdrawals and excess benefits expected to be paid on future deaths and annuitizations (“EDAR”). The liabilities for EDAR and guaranteed withdrawals are accrued for and modified using assumptions consistent with those used in determining DPAC and DPAC amortization, except that amounts are determined in relation to the present value of total expected assessments. Total expected assessments consist principally of estimated future investment margin, surrender, mortality, and other life and annuity policy charges, and unearned revenues once they are recognized as income.

Reserves for traditional fixed annuities are generally recorded at the stated account value. Reserves for indexed annuities are recorded at a value reflecting the fixed guarantees in the product plus the fair value of equity participation in the contract.

Annuity benefits accumulated also includes amounts advanced from the Federal Home Loan Bank of Cincinnati.

Unearned Revenue   Certain upfront policy charges on annuities are deferred as unearned revenue (included in other liabilities) and recognized in net earnings (included in policy charges and other income) using the same assumptions and estimated gross profits used to amortize DPAC.

Life, Accident and Health Reserves Liabilities for future policy benefits under traditional life, accident and health policies are computed using the net level premium method. Computations are based on the original projections of investment yields, mortality, morbidity and surrenders and include provisions for unfavorable deviations unless a loss recognition event (premium deficiency) occurs. Claim reserves and liabilities established for accident and health claims are modified as necessary to reflect actual experience and developing trends.

For long-duration contracts (such as traditional life policies), loss recognition occurs when, based on current expectations as of the measurement date, existing contract liabilities plus the present value of future premiums (including reasonably expected rate increases) are not expected to cover the present value of future claims payments and related settlement and maintenance costs (excluding overhead) as well as unamortized acquisition costs. If a block of business is determined to be in loss recognition, a charge is recorded in earnings in an amount equal to the excess of the present value of expected future claims costs and unamortized acquisition costs over existing reserves plus the present value of expected future premiums (with no provision for adverse deviation). The charge is recorded first to reduce unamortized acquisition costs and then as an additional reserve (if unamortized acquisition costs have been reduced to zero).

In addition, reserves for traditional life policies are subject to adjustment for loss recognition charges that would have been recorded if the unrealized gains from securities had actually been realized. This adjustment is included in unrealized gains (losses) on marketable securities, a component of AOCI in GALIC’s Balance Sheet.

Variable Annuity Assets and Liabilities   Separate accounts related to variable annuities represent the fair value of deposits invested in underlying investment funds on which GALIC earns a fee. Investment funds are selected and may be changed only by the policyholder, who retains all investment risk.

GALIC’s variable annuity contracts contain a guaranteed minimum death benefit (“GMDB”) to be paid if the policyholder dies before the annuity payout period commences. In periods of declining equity markets, the GMDB may exceed the value of the policyholder’s account. A GMDB liability is established for future excess death benefits using assumptions together with a range of reasonably possible scenarios for investment fund performance that are consistent with DPAC capitalization and amortization assumptions.

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Premium Recognition   For traditional life, accident and health products, premiums are recognized as revenue when legally collectible from policyholders. For interest-sensitive life and universal life products, premiums are recorded in a policyholder account, which is reflected as a liability. Revenue is recognized as amounts are assessed against the policyholder account for mortality coverage and contract expenses.

Noncontrolling Interests   For balance sheet purposes, noncontrolling interests represents the interests of shareholders other than GALIC in consolidated entities. In the Statement of Earnings, net earnings and losses attributable to noncontrolling interests represents such shareholders’ interest in the earnings and losses of those entities.

Income Taxes   GALIC and its subsidiaries have an intercompany tax allocation agreement with AFG. Pursuant to the agreement, each company’s tax expense is determined based upon its inclusion in the consolidated tax return of AFG and its includable subsidiaries. Estimated payments are made quarterly during the year. Following year-end, additional settlements are made on the original due date of the return and, when extended, at the time the return is filed. The method of allocation among the companies under the agreement is based upon separate return calculations with current credit for losses to the extent the losses provide a benefit in the consolidated return.

Deferred income taxes are calculated using the liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases and are measured using enacted tax rates. A valuation allowance is established to reduce total deferred tax assets to an amount that will more likely than not be realized.

GALIC recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained under examination by the appropriate taxing authority. Interest and penalties on GALIC’s reserve for uncertain tax positions are recognized as a component of tax expense.

Benefit Plans   GALIC provides retirement benefits to qualified employees of participating companies through the AFG 401(k) Retirement and Savings Plan, a defined contribution plan. AFG and its subsidiaries make all contributions to the retirement fund portion of the plan and match a percentage of employee contributions to the savings fund. Company contributions are expensed in the year for which they are declared.

Statement of Cash Flows   For cash flow purposes, “investing activities” are defined as making and collecting loans and acquiring and disposing of debt or equity instruments and property and equipment. “Financing activities” include obtaining resources from owners and providing them with a return on their investments, borrowing money and repaying amounts borrowed. Annuity receipts, surrenders, benefits and withdrawals are also reflected as financing activities. All other activities are considered “operating.” Short-term investments having original maturities of three months or less when purchased are considered to be cash equivalents for purposes of the financial statements.

Effective October 1, 2016, GALIC early adopted (on a retrospective basis) ASU 2016-15, which addresses the diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. Among other things, this guidance requires proceeds received from the settlement of corporate-owned life insurance policies to be classified as cash inflows from investing activities and allows premiums paid for policies to be reported as cash outflows either from investing activities or operating activities. GALIC has elected to show all corporate-owned life insurance activity in investing activities. Prior to adoption of this guidance, GALIC accounted for these transactions as operating activities. In addition, ASU 2016-15 clarifies when distributions received from investees accounted under the equity method should be accounted for as a cash inflow from operating activities or as a cash inflow from investing activities. GALIC had previously accounted for all distributions from investments accounted for under the equity method as investing activities. The new guidance solely related to the presentation of certain transactions in the statement of cash flows. Accordingly, adoption of this guidance did not impact GALIC’s results of operations or financial position.

Revenue Recognition Guidance Effective in 2018 In May 2014, the FASB issued ASU 2014-09, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized when (or as) the entity satisfies a performance obligation under the contract. The new guidance also updates the accounting for certain costs associated with obtaining and fulfilling contracts with customers and requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Revenue recognition for insurance contracts and financial instruments, which are GALIC’s primary sources of revenue, is excluded from the scope of the new guidance. GALIC will adopt the new guidance effective January 1, 2018. Because the new guidance does not apply to the vast majority of GALIC’s business, management does not expect the adoption of this guidance to have a material impact on GALIC’s results of

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operations or financial position. Based on implementation efforts to date, management believes that the new standard will apply to less than 3% of GALIC’s consolidated revenues.

B.    Segments of Operations

GALIC manages its business as two segments: (i) Annuity and (ii) Run-off life. GALIC’s annuity business markets traditional fixed and fixed-indexed annuities in the retail, financial institutions and education markets. GALIC’s reportable segments and their components were determined based primarily upon similar economic characteristics, products and services.

The following tables (in millions) show GALIC’s assets, revenues and earnings before income taxes by segment.

	December 31,
	2016		2015		2014
Assets
Annuity	$	33,607	$	30,055	$	27,218
Run-off life	755		773		794
Total assets	$	34,362	$	30,828	$	28,012

	2016			2015			2014
Revenues
Annuity:
Net investment income	$	1,355		$	1,211		$	1,120
Other income	104			100			94
Total annuity	1,459			1,311			1,214
Run-off life	49			45			48
Total revenues before realized gains (losses)	1,508			1,356			1,262
Realized gains (losses) on securities	(9		)	(16		)	35
Total revenues	$	1,499		$	1,340		$	1,297

Earnings Before Income Taxes
Annuity	$	371		$	333		$	318
Run-off life	5			2			(1		)
Total earnings before realized gains (losses) and income taxes	376			335			317
Realized gains (losses) on securities	(9		)	(16		)	35
Total earnings before income taxes	$	367		$	319		$	352

C.    Fair Value Measurements

Accounting standards for measuring fair value are based on inputs used in estimating fair value. The three levels of the hierarchy are as follows:

Level 1 — Quoted prices for identical assets or liabilities in active markets (markets in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis). GALIC’s Level 1 financial instruments consist primarily of publicly traded equity securities and highly liquid government bonds for which quoted market prices in active markets are available.

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar assets or liabilities in inactive markets (markets in which there are few transactions, the prices are not current, price quotations vary substantially over time or among market makers, or in which little information is released publicly); and valuations based on other significant inputs that are observable in active markets. GALIC’s Level 2 financial instruments include separate account assets, corporate and municipal fixed maturity securities, mortgage-backed securities (“MBS”), non-affiliated common stocks and equity index call options priced using observable inputs. Level 2 inputs include benchmark yields, reported trades, corroborated broker/dealer quotes, issuer spreads and benchmark securities. When non-binding broker quotes can be corroborated by comparison to similar securities priced using observable inputs, they are classified as Level 2.

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Level 3 — Valuations derived from market valuation techniques generally consistent with those used to estimate the fair values of Level 2 financial instruments in which one or more significant inputs are unobservable or when the market for a security exhibits significantly less liquidity relative to markets supporting Level 2 fair value measurements. The unobservable inputs may include management’s own assumptions about the assumptions market participants would use based on the best information available in the circumstances. GALIC’s Level 3 is comprised of financial instruments whose fair value is estimated based on non-binding broker quotes or internally developed using significant inputs not based on, or corroborated by, observable market information.

GALIC’s management is responsible for the valuation process and uses data from outside sources (including nationally recognized pricing services and broker/dealers) in establishing fair value. The Company's internal investment professionals are a group of approximately 25 analysts whose primary responsibility is to manage AFG’s investment portfolio. These professionals monitor individual investments as well as overall industries and are active in the financial markets on a daily basis. The group is led by AFG’s chief investment officer, who reports directly to one of AFG’s Co-CEOs. Valuation techniques utilized by pricing services and prices obtained from external sources are reviewed by AFG’s internal investment professionals who are familiar with the securities being priced and the markets in which they trade to ensure the fair value determination is representative of an exit price. To validate the appropriateness of the prices obtained, these investment managers consider widely published indices (as benchmarks), recent trades, changes in interest rates, general economic conditions and the credit quality of the specific issuers. In addition, the Company communicates directly with the pricing services regarding the methods and assumptions used in pricing, including verifying, on a test basis, the inputs used by the service to value specific securities.

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Assets and liabilities measured and carried at fair value in the financial statements are summarized below (in millions):

	Level 1		Level 2		Level 3		Total
December 31, 2016
Assets:
Available for sale (“AFS”) fixed maturities:
U.S. Government and government agencies	$	10	$	32	$	8	$	50
States, municipalities and political subdivisions	—		4,101		75		4,176
Foreign government	—		13		—		13
Residential MBS	—		2,449		148		2,597
Commercial MBS	—		1,324		25		1,349
Asset-backed securities (“ABS”)	—		4,160		359		4,519
Corporate and other	15		14,649		652		15,316
Total AFS fixed maturities	25		26,728		1,267		28,020
Trading fixed maturities	—		117		—		117
Equity securities	360		25		110		495
Variable annuity assets (separate accounts) (*)	—		600		—		600
Equity options — fixed-indexed annuities	—		492		—		492
Other assets — derivatives	—		1		—		1
Total assets accounted for at fair value	$	385	$	27,963	$	1,377	$	29,725
Liabilities:
Derivatives in annuity benefits accumulated	$	—	$	—	$	1,759	$	1,759
Other liabilities — derivatives	—		30		—		30
Total liabilities accounted for at fair value	$	—	$	30	$	1,759	$	1,789
December 31, 2015
Assets:
Available for sale fixed maturities:
U.S. Government and government agencies	$	10	$	35	$	15	$	60
States, municipalities and political subdivisions	—		3,934		32		3,966
Foreign government	—		13		—		13
Residential MBS	—		2,400		184		2,584
Commercial MBS	—		1,938		36		1,974
Asset-backed securities	—		3,159		333		3,492
Corporate and other	16		12,801		580		13,397
Total AFS fixed maturities	26		24,280		1,180		25,486
Trading fixed maturities	—		114		—		114
Equity securities	372		31		83		486
Variable annuity assets (separate accounts) (*)	—		608		—		608
Equity options — fixed-indexed annuities	—		241		—		241
Other assets — derivatives	—		2		—		2
Total assets accounted for at fair value	$	398	$	25,276	$	1,263	$	26,937
Liabilities:
Derivatives in annuity benefits accumulated	$	—	$	—	$	1,369	$	1,369
Other liabilities — derivatives	—		8		—		8
Total liabilities accounted for at fair value	$	—	$	8	$	1,369	$	1,377

 (*)   Variable annuity liabilities equal the fair value of variable annuity assets.

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The transfers between Level 1 and Level 2 for the years ended December 31, 2016, 2015 and 2014 are reflected in the table below at fair value as of the end of the reporting period (dollars in millions):

	Level 2 To Level 1 Transfers									Level 1 To Level 2 Transfers
	# of Transfers			Fair Value						# of Transfers			Fair Value
	2016	2015	2014	2016		2015		2014		2016	2015	2014	2016		2015		2014
Perpetual preferred stocks	—	—	1	$	—	$	—	$	4	1	—	3	$	1	$	—	$	14
Common stocks	2	1	—	—		—		—		2	1	1	—		—		—

Transfers between Level 1 and Level 2 for all periods presented were a result of increases or decreases in observable trade activity.

Approximately 5% of the total assets carried at fair value on December 31, 2016 were Level 3 assets. Approximately 80% ($1.10 billion) of the Level 3 assets were priced using non-binding broker quotes, for which there is a lack of transparency as to the inputs used to determine fair value. Details as to the quantitative inputs are neither provided by the brokers nor otherwise reasonably obtainable by GALIC. Since internally developed Level 3 asset fair values represent approximately 1% of the total assets measured at fair value, any justifiable changes in unobservable inputs used to determine internally developed fair values would not have a material impact on GALIC’s financial position.

The only significant Level 3 assets or liabilities carried at fair value in the financial statements that were not measured using broker quotes are the derivatives embedded in GALIC’s fixed-indexed annuity liabilities, which are measured using a discounted cash flow approach and had a fair value of $1.76 billion at December 31, 2016. The following table presents information about the unobservable inputs used by management in determining fair value of these embedded derivatives at December 31, 2016. See Note F — “Derivatives.”

Unobservable Input	Range
Adjustment for credit risk	0.4% – 2.9% over the risk free rate
Risk margin for uncertainty in cash flows	0.68% reduction in the discount rate
Surrenders	3% – 21% of indexed account value
Partial surrenders	2% – 10% of indexed account value
Annuitizations	0.1% – 1% of indexed account value
Deaths	1.5% – 8.0% of indexed account value
Budgeted option costs	2.4% – 3.6% of indexed account value

The range of adjustments for credit risk reflects credit spread variations across the yield curve. The range of projected surrender rates reflects the specific surrender charges and other features of GALIC’s individual fixed-indexed annuity products with an expected range of 6% to 10% in the majority of future calendar years (3% to 21% over all periods). Increasing the budgeted option cost or risk margin for uncertainty in cash flows assumptions in the table above would increase the fair value of the fixed-indexed annuity embedded derivatives, while increasing any of the other unobservable inputs in the table above would decrease the fair value of the embedded derivatives.

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Changes in balances of Level 3 financial assets and liabilities carried at fair value during 2016, 2015 and 2014 are presented below (in millions). The transfers into and out of Level 3 were due to changes in the availability of market observable inputs. All transfers are reflected in the table at fair value as of the end of the reporting period.

				Total realized/unrealized gains (losses) included in
	Balance at December 31, 2015			Net income			Other comprehensive income (loss)			Purchases and issuances			Sales and settlements			Transfer into Level 3		Transfer out of Level 3			Balance at December 31, 2016
AFS fixed maturities:
U.S. government agency	$	15		$	(7	)	$	—		$	—		$	—		$	—	$	—		$	8
State and municipal	32			—			(3		)	47			(1		)	—		—			75
Residential MBS	184			(3		)	(2		)	6			(26		)	29		(40		)	148
Commercial MBS	36			(1		)	—			—			(6		)	—		(4		)	25
Asset-backed securities	333			(1		)	1			30			(20		)	49		(33		)	359
Corporate and other	580			(1		)	(9		)	134			(58		)	22		(16		)	652
Total AFS fixed maturities	1,180			(13		)	(13		)	217			(111		)	100		(93		)	1,267
Equity securities	83			(6		)	23			28			(15		)	9		(12		)	110
Total Level 3 assets	$	1,263		$	(19	)	$	10		$	245		$	(126	)	$	109	$	(105	)	$	1,377
Embedded derivatives (*)	$	(1,369	)	$	(211	)	$	—		$	(277	)	$	98		$	—	$	—		$	(1,759	)
Total Level 3 liabilities	$	(1,369	)	$	(211	)	$	—		$	(277	)	$	98		$	—	$	—		$	(1,759	)

(*) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $17 million in 2016.

				Total realized/unrealized gains (losses) included in
	Balance at December 31, 2014			Net income			Other comprehensive income (loss)			Purchases and issuances			Sales and settlements			Transfer into Level 3		Transfer out of Level 3			Balance at December 31, 2015
AFS fixed maturities:
U.S. government agency	$	15		$	—		$	—		$	—		$	—		$	—	$	—		$	15
State and municipal	24			—			—			9			(1		)	—		—			32
Residential MBS	235			(2		)	(2		)	—			(32		)	48		(63		)	184
Commercial MBS	37			(1		)	(1		)	—			(2		)	4		(1		)	36
Asset-backed securities	175			1			(5		)	184			(40		)	28		(10		)	333
Corporate and other	484			(4		)	(9		)	147			(47		)	9		—			580
Total AFS fixed maturities	970			(6		)	(17		)	340			(122		)	89		(74		)	1,180
Equity securities	47			(3		)	(6		)	51			—			—		(6		)	83
Total Level 3 assets	$	1,017		$	(9	)	$	(23	)	$	391		$	(122	)	$	89	$	(80	)	$	1,263
Embedded derivatives (*)	$	(1,160	)	$	(17	)	$	—		$	(257	)	$	65		$	—	$	—		$	(1,369	)
Total Level 3 liabilities	$	(1,160	)	$	(17	)	$	—		$	(257	)	$	65		$	—	$	—		$	(1,369	)

(*) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects losses related to the unlocking of actuarial assumptions of $28 million in 2015.

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				Total realized/unrealized gains (losses) included in
	Balance at December 31, 2013			Net income			Other comprehensive income (loss)			Purchases and issuances			Sales and settlements			Transfer into Level 3		Transfer out of Level 3			Balance at December 31, 2014
AFS fixed maturities:
U.S. government agency	$	15		$	—		$	—		$	—		$	—		$	—	$	—		$	15
State and municipal	20			—			1			—			—			3		—			24
Residential MBS	267			4			3			10			(27		)	62		(84		)	235
Commercial MBS	24			(1		)	—			—			—			14		—			37
Asset-backed securities	62			2			(2		)	88			(17		)	65		(23		)	175
Corporate and other	292			3			13			88			(60		)	151		(3		)	484
Total AFS fixed maturities	680			8			15			186			(104		)	295		(110		)	970
Equity securities	8			1			1			31			—			12		(6		)	47
Total Level 3 assets	$	688		$	9		$	16		$	217		$	(104	)	$	307	$	(116	)	$	1,017
Embedded derivatives (*)	$	(804	)	$	(182	)	$	—		$	(221	)	$	47		$	—	$	—		$	(1,160	)
Total Level 3 liabilities	$	(804	)	$	(182	)	$	—		$	(221	)	$	47		$	—	$	—		$	(1,160	)

(*) Total realized/unrealized gains (losses) included in net income for the embedded derivatives reflects gains related to the unlocking of actuarial assumptions of $58 million in 2014.

Fair Value of Financial Instruments   The carrying value and fair value of financial instruments that are not carried at fair value in the financial statements are summarized below (in millions):

	Carrying		Fair Value
	Value		Total		Level 1		Level 2		Level 3
December 31, 2016
Financial assets:
Cash and cash equivalents	$	499	$	499	$	499	$	—	$	—
Mortgage loans	890		887		—		—		887
Policy loans	192		192		—		—		192
Total financial assets not accounted for at fair value	$	1,581	$	1,578	$	499	$	—	$	1,079
Financial liabilities:
Annuity benefits accumulated (*)	$	29,703	$	28,932	$	—	$	—	$	28,932
Total financial liabilities not accounted for at fair value	$	29,703	$	28,932	$	—	$	—	$	28,932
December 31, 2015
Financial assets:
Cash and cash equivalents	$	262	$	262	$	262	$	—	$	—
Mortgage loans	880		883		—		—		883
Policy loans	201		201		—		—		201
Total financial assets not accounted for at fair value	$	1,343	$	1,346	$	262	$	—	$	1,084
Financial liabilities:
Annuity benefits accumulated (*)	$	26,422	$	25,488	$	—	$	—	$	25,488
Total financial liabilities not accounted for at fair value	$	26,422	$	25,488	$	—	$	—	$	25,488

(*) Excludes $204 million and $200 million of life contingent annuities in the payout phase at December 31, 2016 and 2015, respectively.

The carrying amount of cash and cash equivalents approximates fair value. Fair values for mortgage loans are estimated by discounting the future contractual cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings. The fair value of policy loans is estimated to approximate carrying value; policy loans have no defined maturity dates and are inseparable from insurance contracts. The fair value of annuity benefits was estimated based on expected cash flows discounted using forward interest rates adjusted for the Company’s credit risk and includes the impact of maintenance expenses and capital costs.

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D.Balance Sheet Impact of Net Unrealized Gains on Securities

In addition to adjusting equity securities and fixed maturity securities classified as “available for sale” to fair value, GAAP requires that deferred policy acquisition costs and certain other balance sheet amounts related to annuity and life businesses be adjusted to the extent that unrealized gains and losses from securities would result in adjustments to those balances had the unrealized gains or losses actually been realized. The following table shows (in millions) the components of the net unrealized gains (losses) on securities that is included in AOCI in GALIC’s Balance Sheet.

	Asset (Liability) before Net Unrealized			Impact of Net Unrealized Gains on Securities			Carrying Value of Asset (Liability)
December 31, 2016
Fixed maturities	$	27,310		$	710		$	28,020
Equity securities	447			48			495
Deferred policy acquisition costs	1,270			(273		)	997
Annuity benefits accumulated	(29,829		)	(78		)	(29,907		)
Unearned revenue (included in other liabilities)	(36		)	13			(23		)
Net unrealized gain, pretax				420
Deferred tax on unrealized gain				(147		)
Net unrealized gain, after tax (included in AOCI)				$	273
December 31, 2015
Fixed maturities	$	24,903		$	583		$	25,486
Equity securities	489			(3		)	486
Deferred policy acquisition costs	1,187			(233		)	954
Annuity benefits accumulated	(26,558		)	(64		)	(26,622		)
Unearned revenue (included in other liabilities)	(42		)	11			(31		)
Net unrealized gain, pretax				294
Deferred tax on unrealized gain				(103		)
Net unrealized gain, after tax (included in AOCI)				$	191

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E.    Investments

Available for sale fixed maturities and equity securities consisted of the following (in millions):

	2016												2015
	Amortized Cost		Gross Unrealized					Net Unrealized			Fair Value		Amortized Cost		Gross Unrealized					Net Unrealized			Fair Value
			Gains		Losses										Gains		Losses
Fixed maturities:
U.S. Government and government agencies	$	51	$	2	$	(3	)	$	(1	)	$	50	$	61	$	2	$	(3	)	$	(1	)	$	60
States, municipalities and political subdivisions	4,063		155		(42		)	113			4,176		3,836		162		(32		)	130			3,966
Foreign government	12		1		—			1			13		12		1		—			1			13
Residential MBS	2,388		216		(7		)	209			2,597		2,344		246		(6		)	240			2,584
Commercial MBS	1,304		46		(1		)	45			1,349		1,903		71		—			71			1,974
Asset-backed securities	4,517		37		(35		)	2			4,519		3,508		21		(37		)	(16		)	3,492
Corporate and other	14,975		448		(107		)	341			15,316		13,239		401		(243		)	158			13,397
Total fixed maturities	$	27,310	$	905	$	(195	)	$	710		$	28,020	$	24,903	$	904	$	(321	)	$	583		$	25,486
Equity securities:
Common stocks	$	391	$	55	$	(9	)	$	46		$	437	$	439	$	32	$	(35	)	$	(3	)	$	436
Perpetual preferred stocks	56		3		(1		)	2			58		50		—		—			—			50
Total equity securities	$	447	$	58	$	(10	)	$	48		$	495	$	489	$	32	$	(35	)	$	(3	)	$	486

The non-credit related portion of other-than-temporary impairment charges is included in other comprehensive income. Cumulative non-credit charges taken for securities still owned at December 31, 2016 and December 31, 2015, respectively, were $149 million and $160 million. Gross unrealized gains on such securities at December 31, 2016 and December 31, 2015 were $101 million and $104 million, respectively. Gross unrealized losses on such securities at December 31, 2016 and December 31, 2015 were $2 million and $5 million, respectively. These amounts represent the non-credit other-than-temporary impairment charges recorded in AOCI adjusted for subsequent changes in fair values and relate to residential MBS.

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The following tables show gross unrealized losses (dollars in millions) on fixed maturities and equity securities by investment category and length of time that individual securities have been in a continuous unrealized loss position at the following balance sheet dates.

	Less Than Twelve Months							Twelve Months or More
	Unrealized Loss			Fair Value		Fair Value as % of Cost		Unrealized Loss			Fair Value		Fair Value as % of Cost
December 31, 2016
Fixed maturities:
U.S. Government and government agencies	$	—		$	8	100	%	$	(3	)	$	7	70	%
States, municipalities and political subdivisions	(38		)	1,288		97	%	(4		)	12		75	%
Residential MBS	(4		)	298		99	%	(3		)	91		97	%
Commercial MBS	(1		)	93		99	%	—			—		—	%
Asset-backed securities	(18		)	1,295		99	%	(17		)	551		97	%
Corporate and other	(87		)	3,636		98	%	(20		)	340		94	%
Total fixed maturities	$	(148	)	$	6,618	98	%	$	(47	)	$	1,001	96	%
Equity securities:
Common stocks	$	(9	)	$	91	91	%	$	—		$	3	100	%
Perpetual preferred stocks	(1		)	32		97	%	—			—		—	%
Total equity securities	$	(10	)	$	123	92	%	$	—		$	3	100	%
December 31, 2015
Fixed maturities:
U.S. Government and government agencies	$	—		$	4	100	%	$	(3	)	$	15	83	%
States, municipalities and political subdivisions	(25		)	1,031		98	%	(7		)	103		94	%
Residential MBS	(2		)	180		99	%	(4		)	99		96	%
Commercial MBS	—			74		100	%	—			13		100	%
Asset-backed securities	(29		)	1,849		98	%	(8		)	355		98	%
Corporate and other	(195		)	4,229		96	%	(48		)	295		86	%
Total fixed maturities	$	(251	)	$	7,367	97	%	$	(70	)	$	880	93	%
Equity securities:
Common stocks	$	(35	)	$	228	87	%	$	—		$	—	—	%
Perpetual preferred stocks	—			23		100	%	—			5		100	%
Total equity securities	$	(35	)	$	251	88	%	$	—		$	5	100	%

At December 31, 2016, the gross unrealized losses on fixed maturities of $195 million relate to 892 securities. Investment grade securities (as determined by nationally recognized rating agencies) represented approximately 83% of the gross unrealized loss and 91% of the fair value.

The determination of whether unrealized losses are other-than-temporary requires judgment based on subjective as well as objective factors.Factors considered and resources used by management include:

a) whether the unrealized loss is credit-driven or a result of changes in market interest rates,

b) the extent to which fair value is less than cost basis,

c) cash flow projections received from independent sources,

d) historical operating, balance sheet and cash flow data contained in issuer SEC filings and news releases,

e) near-term prospects for improvement in the issuer and/or its industry,

f) third party research and communications with industry specialists,

g) financial models and forecasts,

h) the continuity of dividend payments, maintenance of investment grade ratings and hybrid nature of certain investments,

i) discussions with issuer management, and

j) ability and intent to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

GALIC analyzes its MBS securities for other-than-temporary impairment each quarter based upon expected future cash flows. Management estimates expected future cash flows based upon its knowledge of the MBS market, cash flow projections (which reflect loan to collateral values, subordination, vintage and geographic concentration) received from independent sources, implied cash flows inherent in security ratings and analysis of historical payment data. During 2016, GALIC recorded $1 million in other-than-temporary impairment charges related to its residential MBS.

In 2016, GALIC recorded approximately $17 million and $7 million in other-than-temporary impairment charges related to corporate bonds and other fixed maturities, respectively.

GALIC recorded $41 million in other-than-temporary impairment charges on common stocks in 2016. At December 31, 2016, the gross unrealized losses on common stocks of $9 million relate to 20 securities, one of which has been in an unrealized loss position for more than 12 months.

Management believes GALIC will recover its cost basis in the securities with unrealized losses and that GALIC has the ability to hold the securities until they recover in value and had no intent to sell them at December 31, 2016.

A progression of the credit portion of other-than-temporary impairments on fixed maturity securities for which the non-credit portion of an impairment has been recognized in other comprehensive income is shown below (in millions):

	2016			2015			2014
Balance at January 1	$	110		$	115		$	125
Additional credit impairments on:
Previously impaired securities	1			—			—
Securities without prior impairments	—			1			—
Reductions due to sales or redemptions	(7		)	(6		)	(10		)
Balance at December 31	$	104		$	110		$	115

The table below sets forth the scheduled maturities of available for sale fixed maturities as of December 31, 2016 (dollars in millions). Securities with sinking funds are reported at average maturity. Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

	Amortized		Fair Value
	Cost		Amount		%
Maturity
One year or less	$	615	$	626	2	%
After one year through five years	3,952		4,185		15	%
After five years through ten years	10,922		11,088		40	%
After ten years	3,612		3,656		13	%
	19,101		19,555		70	%
ABS (average life of approximately 5 years)	4,517		4,519		16	%
MBS (average life of approximately 4.5 years)	3,692		3,946		14	%
Total	$	27,310	$	28,020	100	%

Certain risks are inherent in fixed maturity securities, including loss upon default, price volatility in reaction to changes in interest rates, and general market factors and risks associated with reinvestment of proceeds due to prepayments or redemptions in a period of declining interest rates.

There were no investments in individual issuers that exceeded 10% of shareholder’s equity at December 31, 2016 or 2015.

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The following table shows (in millions) investment income earned and investment expenses incurred:

	2016			2015			2014
Investment income:
Fixed maturities	$	1,248		$	1,138		$	1,047
Equity securities	24			21			16
Equity in earnings of partnerships and similar investments	22			16			9
Mortgage loans	47			45			42
Policy loans	11			12			12
Real estate and other	34			7			17
Gross investment income	1,386			1,239			1,143
Investment expenses	(10		)	(9		)	(4		)
Net investment income	$	1,376		$	1,230		$	1,139

GALIC’s investment portfolio is managed by a subsidiary of AFG. Investment expenses included investment management fees charged by this subsidiary of $5 million, $6 million and less than $1 million in the years ended December 31, 2016, 2015 and 2014, respectively.

Realized gains (losses) and changes in unrealized appreciation (depreciation) related to fixed maturity and equity security investments are summarized as follows (in millions):

	2016												2015
	Realized gains (losses)												Realized gains (losses)
	Before Impairments			Impairments			Total			Change in Unrealized			Before Impairments			Impairments			Total			Change in Unrealized
Fixed maturities	$	32		$	(25	)	$	7		$	127		$	24		$	(28	)	$	(4	)	$	(698	)
Equity securities	17			(41		)	(24		)	51			17			(36		)	(19		)	(49		)
Mortgage loans and other investments	—			—			—			—			(1		)	(2		)	(3		)	—
Other (*)	(7		)	15			8			(52		)	(5		)	15			10			320
Total pretax	42			(51		)	(9		)	126			35			(51		)	(16		)	(427		)
Tax effects	(15		)	18			3			(44		)	(12		)	18			6			149
Net of tax	$	27		$	(33	)	$	(6	)	$	82		$	23		$	(33	)	$	(10	)	$	(278	)

	2014
	Realized gains (losses)
	Before Impairments			Impairments			Total			Change in Unrealized
Fixed maturities	$	32		$	(8	)	$	24		$	465
Equity securities	16			(8		)	8			6
Mortgage loans and other investments	—			—			—			—
Other (*)	(2		)	5			3			(222		)
Total pretax	46			(11		)	35			249
Tax effects	(16		)	4			(12		)	(87		)
Net of tax	$	30		$	(7	)	$	23		$	162

(*) Primarily adjustments to deferred policy acquisition costs and reserves related to annuities.

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Gross realized gains and losses (excluding impairment write-downs and mark-to-market of derivatives) on available for sale fixed maturity and equity security investment transactions included in the statement of cash flows consisted of the following (in millions):

	2016			2015			2014
Fixed maturities:
Gross gains	$	45		$	31		$	29
Gross losses	(6		)	(5		)	(1		)
Equity securities:
Gross gains	19			18			16
Gross losses	(2		)	(1		)	—

F.    Derivatives

As discussed under “Derivatives” in Note A — “Accounting Policies” to the financial statements, GALIC uses derivatives in certain areas of its operations.

Derivatives That Do Not Qualify for Hedge Accounting   The following derivatives that do not qualify for hedge accounting under GAAP are included in GALIC’s Balance Sheet at fair value (in millions):

		December 31, 2016				December 31, 2015
Derivative	Balance Sheet Line	Asset		Liability		Asset		Liability
MBS with embedded derivatives	Fixed maturities	$	82	$	—	$	100	$	—
Public company warrants	Equity securities	4		—		4		—
Fixed-indexed annuities (embedded derivative)	Annuity benefits accumulated	—		1,759		—		1,369
Equity index call options	Equity options — fixed-indexed annuities	492		—		241		—
Reinsurance contracts (embedded derivative)	Other liabilities	—		8		—		7
		$	578	$	1,767	$	345	$	1,376

The MBS with embedded derivatives consist primarily of interest-only MBS with interest rates that float inversely with short-term rates. GALIC records the entire change in the fair value of these securities in earnings. These investments are part of GALIC’s overall investment strategy and represent a small component of GALIC’s overall investment portfolio.

Warrants to purchase shares of publicly traded companies, which represent a small component of GALIC’s overall investment portfolio, are considered to be derivatives that are required to be carried at fair value through earnings. GALIC exercised its most significant warrant position in the first quarter of 2015.

GALIC’s fixed-indexed annuities provide policyholders with a crediting rate tied, in part, to the performance of an existing stock market index. GALIC attempts to mitigate the risk in the index-based component of these products through the purchase of call options on the appropriate index. GALIC receives collateral from its counterparties to support its purchased call option assets. This collateral ($380 million at December 31, 2016 and $211 million at December 31, 2015) is shown as funds held as collateral in GALIC’s Balance Sheet with an offsetting liability to return the collateral, which is included in liability for funds held as collateral. GALIC’s strategy is designed so that the change in the fair value of the call option assets will generally offset the economic change in the liabilities from the index participation. Both the index-based component of the annuities and the related call options are considered derivatives. Fluctuations in interest rates and the stock market, among other factors, can cause volatility in the periodic measurement of fair value of the embedded derivative that management believes can be inconsistent with the long-term economics of these products.

As discussed under “Reinsurance” in Note A to the financial statements, certain reinsurance contracts are considered to contain embedded derivatives.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

The following table summarizes the gain (loss) included in GALIC’s Statement of Earnings for changes in the fair value of derivatives that do not qualify for hedge accounting (in millions):

Derivative	Statement of Earnings Line	2016			2015			2014
MBS with embedded derivatives	Realized gains on securities	$	(7	)	$	(5	)	$	4
Public company warrants	Realized gains on securities	—			—			—
Interest rate swaptions	Realized gains on securities	—			—			(2		)
Fixed-indexed annuities (embedded derivative) (*)	Annuity benefits	(211		)	(17		)	(182		)
Equity index call options	Annuity benefits	141			(56		)	181
Reinsurance contracts (embedded derivative)	Net investment income	(1		)	6			(3		)
		$	(78	)	$	(72	)	$	(2	)

(*) The change in fair value of the embedded derivative includes losses related to unlocking of actuarial assumptions of $17 million in 2016 compared to losses of $28 million in 2015 and gains related to unlocking of actuarial assumptions of $58 million in 2014.

Derivatives Designated and Qualifying as Cash Flow Hedges   As of December 31, 2016, GALIC has entered into seven interest rate swaps that are designated and qualify as highly effective cash flow hedges to mitigate interest rate risk related to certain floating-rate securities included in GALIC’s portfolio of fixed maturity securities. The purpose of each of these swaps is to effectively convert a portion of GALIC’s floating-rate fixed maturity securities to fixed rates by offsetting the variability in cash flows attributable to changes in short-term LIBOR.

Under the terms of the swaps, GALIC receives fixed-rate interest payments in exchange for variable interest payments based on short-term LIBOR. The notional amounts of the interest rate swaps amortize down over each swap’s respective life (the swaps expire between August 2019 and June 2030) in anticipation of the expected decline in GALIC’s portfolio of fixed maturity securities with floating interest rates based on short-term LIBOR. The total outstanding notional amount of GALIC’s interest rate swaps increased to $1.08 billion at December 31, 2016 compared to $604 million at December 31, 2015, reflecting four new swaps with an aggregate notional amount at issuance of $610 million entered into in 2016, partially offset by the scheduled amortization discussed above. The fair value of the effective portion of the interest rate swaps in an asset position and included in other assets was $1 million at December 31, 2016 and $2 million at December 31, 2015. The fair value of the effective portion of interest rate swaps in a liability position and included in other liabilities was $22 million at December 31, 2016 and less than $1 million at December 31, 2015. The net unrealized gain or loss on cash flow hedges is included in AOCI, net of DPAC and deferred taxes. Amounts reclassified from AOCI (before DPAC and taxes) to net investment income were $7 million and $6 million in 2016 and 2015, respectively. There was no ineffectiveness recorded in net earnings during these periods. A collateral receivable supporting these swaps of $60 million at December 31, 2016 and $14 million at December 31, 2015 is included in other assets in GALIC’s Balance Sheet.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

G.    Deferred Policy Acquisition Costs

A progression of deferred policy acquisition costs is presented below (in millions):

	Deferred Costs			Sales Inducements			PVFP			Subtotal			Unrealized (*)			Total
Balance at December 31, 2013	$	860		$	147		$	77		$	1,084		$	(336	)	$	748
Additions	198			8			—			206			—			206
Amortization:
Periodic amortization	(128		)	(26		)	(11		)	(165		)	—			(165		)
Annuity unlocking	(22		)	(1		)	—			(23		)	—			(23		)
Included in realized gains	2			1			—			3			—			3
Change in unrealized	—			—			—			—			(189		)	(189		)
Balance at December 31, 2014	910			129			66			1,105			(525		)	580
Additions	224			11			—			235			—			235
Amortization:
Periodic amortization	(159		)	(26		)	(11		)	(196		)	—			(196		)
Annuity unlocking	31			4			—			35			—			35
Included in realized gains	8			1			—			9			—			9
Change in unrealized	—			—			—			—			291			291
Balance at December 31, 2015	1,014			119			55			1,188			(234		)	954
Additions	229			9			—			238			—			238
Amortization:
Periodic amortization	(168		)	(24		)	(9		)	(201		)	—			(201		)
Annuity unlocking	25			4			—			29			—			29
Included in realized gains	6			2			—			8			—			8
Change in unrealized	—			—			—			—			(31		)	(31		)
Balance at December 31, 2016	$	1,106		$	110		$	46		$	1,262		$	(265	)	$	997

(*) Unrealized adjustments to DPAC includes net unrealized gains on securities and net unrealized gains/losses on cash flow hedges.

The present value of future profits (“PVFP”) amounts in the table above are net of $134 million and $125 million of accumulated amortization at December 31, 2016 and 2015, respectively. During each of the next five years, the PVFP is expected to decrease at a rate of approximately one-sixth of the balance at the beginning of each respective year.

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H.    Shareholder’s Equity

Capital Contributions from Parent In addition to receiving a $15 million cash capital contribution from GAFRI in 2016, which is presented in the statement of cash flows, GALIC received non-cash capital contributions from GAFRI totaling $30 million in 2016, $24 million in 2015 and $10 million in 2014. The non-cash capital contributions were investments and other similar assets, as well as GAFRI’s payment of certain overhead expenses on behalf of GALIC.

Accumulated Other Comprehensive Income, Net of Tax (“AOCI”)   Comprehensive income is defined as all changes in Shareholder’s Equity except those arising from transactions with shareholders. Comprehensive income includes net earnings and other comprehensive income, which consists primarily of changes in net unrealized gains or losses on available for sale securities.

The progression of the components of accumulated other comprehensive income follows (in millions):

			Other Comprehensive Income (Loss)
	AOCI Beginning Balance		Pretax			Tax			Net of tax			AOCI Ending Balance
Year ended December 31, 2016
Net unrealized gains on securities:
Unrealized holding gains on securities arising during the period			$	117		$	(41	)	$	76
Reclassification adjustment for realized (gains) losses included in net earnings (a)			9			(3		)	6
Total net unrealized gains on securities (b)	$	191	126			(44		)	82			$	273
Net unrealized gains (losses) on cash flow hedges	1		(12		)	4			(8		)	(7		)
Total	$	192	$	114		$	(40	)	$	74		$	266
Year ended December 31, 2015
Net unrealized gains (losses) on securities:
Unrealized holding losses on securities arising during the period			$	(440	)	$	154		$	(286	)
Reclassification adjustment for realized (gains) losses included in net earnings (a)			13			(5		)	8
Total net unrealized gains (losses) on securities (b)	$	469	(427		)	149			(278		)	$	191
Net unrealized gains on cash flow hedges	—		1			—			1			1
Total	$	469	$	(426	)	$	149		$	(277	)	$	192
Year ended December 31, 2014
Net unrealized gains on securities:
Unrealized holding gains on securities arising during the period			$	284		$	(99	)	$	185
Reclassification adjustment for realized (gains) losses included in net earnings (a)			(35		)	12			(23		)
Total net unrealized gains on securities (b)	$	307	249			(87		)	162			$	469
Net unrealized gains on cash flow hedges	—		—			—			—			—
Total	$	307	$	249		$	(87	)	$	162		$	469

(a) The reclassification adjustment out of net unrealized gains on securities affected the following lines in GALIC’s Statement of Earnings:

OCI component	Affected line in the statement of earnings
Pretax	Realized gains on securities
Tax	Provision for income taxes

(b) Includes net unrealized gains of $34 million at December 31, 2016 compared to net unrealized gains of $33 million and $37 million at December 31, 2015 and 2014, respectively, related to securities for which only the credit portion of an other-than-temporary impairment has been recorded in earnings.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

I.    Income Taxes

The following is a reconciliation of income taxes at the statutory rate of 35% to the provision for income taxes as shown in GALIC’s Statement of Earnings (dollars in millions):

	2016					2015					2014
	Amount			% of EBT		Amount			% of EBT		Amount			% of EBT
Earnings before income taxes (“EBT”)	$	367				$	319				$	352
Income taxes at statutory rate	$	128		35	%	$	112		35	%	$	123		35	%
Effect of permanent items	(1		)	—	%	(4		)	(1	%)	(3		)	(1	%)
Provision for income taxes as shown in the statement of earnings	$	127		35	%	$	108		34	%	$	120		34	%

GALIC’s 2012 — 2016 tax years remain subject to examination by the IRS.

GALIC did not have any earnings or losses subject to tax in a foreign jurisdiction for the years ended December 31, 2016, 2015 and 2014.

The total income tax provision (credit) consists of (in millions):

	2016			2015			2014
Current taxes:
Federal	$	185		$	133		$	170
State	4			2			4
Deferred taxes:
Federal	(62		)	(27		)	(54		)
Provision for income taxes	$	127		$	108		$	120

Deferred income tax assets and liabilities reflect temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The significant components of deferred tax assets and liabilities included in the GALIC’s Balance Sheet at December 31 were as follows (in millions):

	2016									2015
	Excluding Unrealized Gains			Impact of Unrealized Gains			Total			Excluding Unrealized Gains			Impact of Unrealized Gains			Total
Deferred tax assets:
Insurance claims and reserves	$	489		$	27		$	516		$	404		$	22		$	426
Other, net	19			(5		)	14			22			(4		)	18
Total deferred tax assets	508			22			530			426			18			444
Deferred tax liabilities:
Investment securities	4			(265		)	(261		)	(6		)	(203		)	(209		)
Deferred policy acquisition costs	(375		)	96			(279		)	(348		)	82			(266		)
Total deferred tax liabilities	(371		)	(169		)	(540		)	(354		)	(121		)	(475		)
Net deferred tax assets (liabilities)	$	137		$	(147	)	$	(10	)	$	72		$	(103	)	$	(31	)

The likelihood of realizing deferred tax assets is reviewed periodically. There was no valuation allowance against deferred tax assets as of December 31, 2016 and 2015.

In July 2014, AFG finalized a settlement with the IRS related to tax years 2008 and 2009. As a result, GALIC’s uncertain tax positions were effectively settled, allowing GALIC to reduce its liability for uncertain tax positions by $13 million in the third quarter of 2014. Although GALIC paid $9 million under this settlement, the reduction in this liability resulted in offsetting increases to GALIC’s deferred tax liability and did not impact GALIC’s effective tax rate. The following is a progression of GALIC’s uncertain tax positions, excluding interest and penalties, which all relate to the uncertainty as to the timing of tax return inclusion of investment income of certain debt securities (in millions):

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GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

	2016		2015		2014
Balance at January 1	$	—	$	—	$	13
Reductions for tax positions of prior years	—		—		(4		)
Additions for tax positions of current year	—		—		—
Settlements	—		—		(9		)
Balance at December 31	$	—	$	—	$	—

GALIC’s provision for income taxes included a benefit of $1 million in 2014.

Cash payments for income taxes, net of refunds, were $236 million, $100 million and $227 million for 2016, 2015 and 2014, respectively.

J.     Contingencies

GALIC and its subsidiaries are involved in litigation from time to time, generally arising in the ordinary course of business. This litigation may include, but is not limited to, general commercial disputes, lawsuits brought by policyholders, employment matters, reinsurance collection matters and actions challenging certain business practices. None of these matters are expected to have a material adverse impact on GALIC’s results of operations or financial condition.

K.     Insurance

Securities owned by GALIC, having a carrying value of approximately $26 million at December 31, 2016, were on deposit as required by regulatory authorities.

FHLB Funding Agreements   GALIC is a member of the Federal Home Loan Bank of Cincinnati (“FHLB”). The FHLB makes advances and provides other banking services to member institutions. Members are required to purchase stock in the FHLB in addition to maintaining collateral deposits that back any funds advanced. GALIC’s $44 million investment in FHLB capital stock at December 31, 2016, is included in other investments at cost. Membership in the FHLB provides the annuity operations with an additional source of liquidity. These advances further the FHLB’s mission of improving access to housing by increasing liquidity in the residential mortgage-backed securities market. In 2016, the FHLB advanced GALIC $150 million, increasing the total amount advanced to $935 million (included in annuity benefits accumulated) at December 31, 2016. In the fourth quarter of 2016, GALIC extended the terms on advances totaling $200 million by four years. Interest rates under the various funding agreements on these advances range from 0.03% to 0.53% over LIBOR (average rate of 1.18% at December 31, 2016). While these advances must be repaid between 2018 and 2021 ($285 million in 2018, $500 million in 2020 and $150 million in 2021), GALIC has the option to prepay all or a portion of the advances. The advances on these agreements are collateralized by mortgage-backed securities, which have a total fair value of $1.08 billion (included in available for sale fixed maturity securities) at December 31, 2016 and which have similar expected lives as the advances. Interest credited on the funding agreements, which is included in annuity benefits, was $8 million in 2016, $3 million in 2015 and $1 million in 2014.

Statutory Information   GALIC and its insurance subsidiaries are required to file financial statements with state insurance regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). Net earnings and capital and surplus on a statutory basis for GALIC and its insurance subsidiaries were as follows (in millions):

	Net Earnings						Capital and Surplus
	2016		2015		2014		2016		2015
GALIC consolidated life insurance companies	$	167	$	399	$	384	$	1,976	$	1,719

The National Association of Insurance Commissioners’ (“NAIC”) model law for risk based capital (“RBC”) applies to life insurance companies. RBC formulas determine the amount of capital that an insurance company needs so that it has an acceptable expectation of not becoming financially impaired. Companies below specific trigger points or ratios are subject to regulatory action. At December 31, 2016 and 2015, the capital ratios of GALIC and its life insurance companies substantially exceeded the RBC requirements. GALIC did not use any prescribed or permitted statutory accounting practices that differed from the NAIC statutory accounting practices at December 31, 2016 or 2015.

GALIC paid dividends to GAFRI totaling $140 million, $110 million and $200 million in 2016, 2015 and 2014, respectively. The maximum amount of dividends that can be paid to shareholders in 2017 by life insurance companies domiciled in the State

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GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

of Ohio without prior approval of the Insurance Commissioner is the greater of 10% of statutory surplus as regards to policyholders or statutory net income as of the preceding December 31, but only to the extent of statutory earned surplus as of the preceding December 31. The maximum amount of dividends payable in 2017 by GALIC without prior approval is $197 million, based on policyholder surplus. The maximum amount of dividends receivable from GALIC’s subsidiaries in 2017 without prior approval is $27 million.

Reinsurance GALIC has reinsured approximately $10.22 billion of its $13.49 billion in face amount of life insurance at December 31, 2016 compared to $11.19 billion of its $14.67 billion in face amount of life insurance at December 31, 2015. Life written premiums ceded were $31 million, $34 million and $36 million for 2016, 2015 and 2014, respectively. Reinsurance recoveries on ceded life policies were $44 million, $45 million and $55 million for 2016, 2015 and 2014, respectively. To the extent that any reinsuring companies are unable to meet obligations under agreements covering reinsurance ceded, GALIC would remain liable.

Fixed Annuities   For certain products, the liability for “annuity benefits accumulated” includes reserves for excess benefits expected to be paid on future deaths and annuitizations, guaranteed withdrawal benefits and accrued persistency and premium bonuses. The liabilities included in GALIC’s Balance Sheet for these benefits, excluding the impact of unrealized gains on securities, were as follows at December 31 (in millions):

	2016		2015
Expected death and annuitization	$	223	$	214
Guaranteed withdrawal benefits	278		203
Accrued persistency and premium bonuses	6		11

Variable Annuities   At December 31, 2016, the aggregate guaranteed minimum death benefit value (assuming every variable annuity policyholder died on that date) on GALIC’s variable annuity policies exceeded the fair value of the underlying variable annuities by $20 million, compared to $27 million at December 31, 2015. Death benefits paid in excess of the variable annuity account balances were less than $1 million in each of the last three years.

L.     Additional Information

Related Parties   Certain administrative, management, accounting, actuarial, data processing, collection and investment services are provided under agreements between GALIC and its parent, GAFRI, based on actual costs incurred. In 2016, 2015 and 2014, GALIC paid GAFRI $32 million, $27 million and $26 million, respectively, for such services.

Operating Leases   Total rental expense for leases of office space was $4 million in 2016, 2015 and 2014. GALIC leases space from AFG. GALIC has no contractual obligations for rent but expects to pay similar amounts in future periods to AFG.

Financial Instruments — Unfunded Commitments On occasion, GALIC has entered into financial instrument transactions that may present off-balance-sheet risks of both a credit and market risk nature. These transactions include commitments to fund loans, loan guarantees and commitments to purchase and sell securities or loans. At December 31, 2016, GALIC had commitments to fund credit facilities and contribute capital to limited partnerships and limited liability corporations of approximately $251 million.

Benefit Plans   GALIC expensed approximately $2 million in 2016 and $1 million in 2015 and 2014, respectively, related to the retirement and employee savings plans.

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GREAT AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES

SUPPLEMENTARY INSURANCE INFORMATION

THREE YEARS ENDED DECEMBER 31, 2016

(IN MILLIONS)

Segment	Deferred policy acquisition costs		Reserves for future policy benefits and claims		Net earned premiums		Net investment income		Benefits, claims, losses and settlement expenses		Amortization of deferred policy acquisition costs		Other operating expenses
2016
Annuity	$	977	$	29,907	$	—	$	1,355	$	800	$	147	$	141
Run-off life	20		691		24		21		29		5		10
Total	$	997	$	30,598	$	24	$	1,376	$	829	$	152	$	151
2015
Annuity	$	930	$	26,622	$	—	$	1,211	$	724	$	134	$	120
Run-off life	24		705		21		19		29		5		9
Total	$	954	$	27,327	$	21	$	1,230	$	753	$	139	$	129
2014
Annuity	$	553	$	23,492	$	—	$	1,120	$	641	$	156	$	99
Run-off life	27		690		23		19		33		5		11
Total	$	580	$	24,182	$	23	$	1,139	$	674	$	161	$	110

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